Middle East among top five in multi-billion dollar remittance sector;
Bahrain selected as ME hub for MTI, the global trade association
International remittance market is up 63 percent in
five years, say the World Bank
The Kingdom of Bahrain is set to cement its position as a respected financial hub with the recent launch of Money Transfer International (MTI), the global trade association promoting the development and interests of the global remittances industry. MTI recently announced that its Gulf chapter office will be based in Bahrain.
According to MTI's regional director and head of the MTI Gulf chapter, Premal Patel, Director, Money Transfer International, Middle East, the region stands as one of the top five performers of the global remittance industry which was pegged at US$550 billion in 2008.
Patel said that a 63 percent increase has been witnessed since 2003.
"Remittance flow from GCC countries alone accounted for 35.6 percent of total remittance flow to developing countries in 2008, with more than 63 percent and 52 percent respectively going to Bangladesh and Pakistan*,” he said.
Citing a recent World Bank report, he shared that remittance flows to developing countries reached $283 billion in 2008. "However, the actual market size is estimated to be more than double of the official figure,” said Patel.
Lady Olga Maitland, CEO of MTI said, “The decision to launch MTI Middle East is in direct response from the remittances sector for a voice to represent their interests.
MTI has the strength and credibility to do this – with a strong Board who carry full legal responsibilities representing the remittances industry. They are Nick Ford, Head of Payments, Capgemini, Neil Burton, Director, Earthport, Vanessa Murden, Director, Travalex, and Pieter Heyn, Director, SUN Microsystems. The Board’s Key Adviser is Marcus Treacher, Head of E-Commerce, Global Transaction Banking supported by Ken Howes, Director Edgar Dunn and Adviser to Pre-paid International Forum and Michael Lafferty, Chairman Lafferty Group, Strategic Adviser to MTI.
“It is with this strong and effective Board, representing the interests of the remittances and payments sector, that gives us the confidence to create MTI Middle East, with Premal Patel as its Director. There is no other organization in the remittance business which has the ability to do this.
“Our role is to liaise with all parties in the business who range from banks, money service businesses, exchange houses, prepaid cards, mobile phone companies – and regulators. Finally our focus is to ensure a world class service to the consumer, the migrant worker and others who depend on these services.”
Michael Lafferty, Chairman, Lafferty Group, Strategic Advisor to MTI Board said a regional association is a valuable asset for industry stakeholders: " MTI is the first global trade association with a board of directors, open constitution and corporate governance.
"MTI will help identify the needs of the region and will work to bring together both the requirements of the remittance sender, often sending home life-saving money, as well as the service providers."
Lafferty noted that the industry is generally operated by a diverse array of suppliers, and that guidelines for operation are often blurred, if not absent.
MTI aims to establish a presence on a global scale by establishing some 25 regional chapters over next few months. The first of these are planned for the Gulf and West Africa with four more chapters in pipeline in Philippines, the Maghreb, Southern Africa and Pakistan.
"The MTI Gulf chapter is geared to facilitate policies and governance to safeguard the interests of industry as a whole. The association will offer benchmarks and best-practice standards, as well as creating a forum for providers and consumers to discuss their needs and issues.”
Lafferty also said that the remittance sector is a good pulse on consumer sentiment, with the World Bank suggesting that this year (2009) could see a drop of recent of at least five percent. He warned that this can have a direct adverse effect on developing economies that rely on inward funds from overseas workers to support GDP (gross domestic product).
Lafferty went on to share that in many countries remittances contribute to poverty management programmes. In the Philippines, for example, remittance flow contributes 10 percent of the GDP.
