Remittances are the funds that are sent by an immigrant to his native country. It is the prime source of foreign cash inflow for most of the developing countries. According to “The World Investment Report” for 2019, global Remittance stood at around $500 billion in 2018. Africa alone had a remittance inflow of around $70 billion with Ghana, Nigeria, and Egypt taking up the largest share.
Remittances are of two types:
- Outward Remittance
In general terms, outward Remittance is the basic process of sending money from your native country to somebody abroad. A Ghanaian family is sending money to someone in the U.K for his foreign study or other expenses, for example.
- Inward Remittance
In basic terms, inward Remittance simply implies sending money from another country to your native country. Someone settled in the U.K sending money back home in Ghana to his family, for example.
Different types of inward Remittance:
- Informal remittances
These are the remittances that are sent through your relatives. The income of the informal remittance currency is not recorded in the statistics of the National account.
- Formal remittances
These are the remittances that are transferred through official channels. And the income of formal remittances is recorded in the statistic of foreign exchange of the nation. Financial institutions, like banks and transfer companies, perform formal transfer services.
Inward remittance charges:
Most of the banks don’t charge any handling fee for inward Remittance. However, inward remittance charges that are applied to the transfers are all in the hands of the correspondent bank or other financial institution. Also, you have an option to instruct your bank to provide full payment to the beneficiary. The inward remittance charges in Ghana are not constant. They are different from bank to bank or from one transfer company to another.
Process for inward Remittance:
The inward Remittance is conducted by a processor and an approver. The task of the processor is to process the Remittance after checking the authenticity of all the documents. While the task of the approver is to approve the transfer. However, each financial institution works with its own set of rules and regulations. Also, different institutions might give you different types of instruction for inward Remittance.
We hope this article was useful to you in knowing about inward and outward Remittance. This article was sponsored by EziPay, one of the most trusted money transfer app.