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Migrant remittances hold the key to Pakistan’s economic balance and sustainability

Published on 12th Jan, Edition 2, 2015


The economy and foreign exchange reserves of Pakistan like most developing countries across the world rely in part on migration and workers’ remittances. To put things in perspective, the $15.83 billion1 that overseas Pakistani workers (Pakistani Diaspora) sent back home in the country’s fiscal year 2014 from July 01, 2013 to June 30, 2014 contributed to the country’s GDP. An IMF research paper stated that workers’ remittances contributed 4% to Pakistan’s GDP, and equivalent to about 22% of annual exports. The continued increase of remittances has now become the second biggest source of dollar inflows in the country after export proceeds. The highest amount was sent from Saudi Arabia, which reached $4.729bn, 30% of the total remittances.

The relationship that exists between remittances and the Pakistani economy, calls for initiatives and incentives from the Government to encourage and motivate migration and remittances. Since April 2009, Pakistan Remittance Initiative (PRI) under the directives and guidance of State Bank of Pakistan (SBP), Overseas Pakistanis Foundation and Ministry of Finance has facilitated overseas Pakistanis to send funds back home in a more convenient, efficient and cheaper manner. Since then the PRI has been extremely proactive, supportive and committed to the cause, strengthening overseas relationships, developing and implementing strategies, and providing financial advisory services among others. We believe the PRI is encouraging remitters to send money through formal channels such as Western Union. By providing fast, reliable and convenient ways of moving money, with a network of over 500,000 agent locations in more than 200 countries and territories, Western Union is a global leader when it comes to moving funds. Pakistan remains as one of the top 10 developing markets in the world in terms of remittance inflows which have grown steadily from $8.9 billion2 in FY2010 to $11.2 billion3, $13.18 billion4, $13.9 billion and $15.83 billion in FY2011, FY2012, FY2013 and FY2014 respectively. Western Union has been operating via a liaison office in Pakistan since 2002 facilitating global inbound and outbound remittances through its agents. The team which comprises of Business Development, Operations and Compliance personnel provides back-end support to our agents. Pakistan is an important market for our company, and with over 8000 agent locations as part of our network including 14 Commercial Banks, 3 Public Sector Enterprises – Pakistan Post Office, Zarai Tarqiati Bank and Khushali Bank as well as 10 State Bank of Pakistan licensed ‘A-category’ Exchange Houses, we have an extensive network in the country.

With the Pakistani diaspora growing every year, and remittance inflows reaching $ 15.83 billion5 in FY2014, Western Union is equipped to cater to the growing and evolving needs of overseas Pakistanis and their families back home, helping them connect especially in times of need. Our long-standing commitment to the communities we work in across the globe is entrenched into our DNA, and hence over the years, Western Union and the Western Union Foundation have worked together to provide support for disaster relief efforts that have helped several families and communities affected by devastating earthquakes and floods in Pakistan. The Western Union Foundation has made financial grants to support our NGO activities, which included providing emergency materials, meals and water to disaster victims. After the severe floods in 2010, the Western Union Foundation contributed US$ 100,000 towards relief efforts to provide victims with basic necessities such as safe drinking water, temporary shelter and access to sanitation. After the more recent earthquake of 2013, the Western Union Foundation made a grant of US$ 50,000 to Save the Children to support their activities of providing emergency material, food and water to the disaster victims. In addition, in the critical period after the disasters, Western Union has also offered ‘zero transfer fee’ transactions so that Pakistani diaspora and well-wishers in key sending countries around the world could send funds to support family and friends in times of these natural disasters. (Western Union may make money from currency exchange.)


While accessibility is a definite advantage for Western Union, a strong and diverse product portfolio and ease and speed of transfers, are critical components that make the Western Union offering a preferred choice of customers. In Pakistan, our focus has remained on serving our customers with the best products and services. We have done so by expanding our network, further strengthening our brand and constantly improving our point of sale customer services.

With the Western Union service, funds sent in cash from international locations can be received in Pakistan through cash at a physical agent location. Money in Minutes** (MIM) is one such product which facilitates cash transactions between a sender and receiver. Also, through selected foreign exchange agent locations, our Pakistani customers can send funds abroad from Pakistan. While the emphasis on our core product will continue to remain, we have also ventured into the new era of direct banking transfers using electronic channels. This has been made possible with evolution in technology and consumer preferences and demand for additional ways of receiving funds. Keeping our customer’s voice as the driving force, the company has recently introduced a new product ‘Direct to Bank**’ (D2B) which allows our customers from sending countries to remit funds at ‘Zero Transfer Fee*’ directly into the beneficiary’s bank account at participating banks. Western Union customers can either do this through agent locations outside Pakistan or by logging into our website at www.westernunion.com. This way of remitting funds to Pakistan using the Western Union network and website was made possible through the collaboration between SBP, PRI and Summit Bank Limited.

Sending funds through the Western Union D2B service is extremely easy. The benefits of the D2B service for our customers include the ability to send funds from virtually anywhere in the world to more than 26 commercial banks in Pakistan, over 22 million bank account holders across Pakistan and the facility to transfer up to PKR 500,000 per transaction per day. This product provides our customers with an additional channel for sending and receiving funds, and also has safety benefits – the receiver does not have to carry large amount of funds.

For more than 160 years, consumers have trusted Western Union to connect with friends and loved ones across the globe. This rich heritage has provided a strong foundation for building one of the largest money-transfer networks in the world. We create opportunity through reliable products and services, ethical operations, and a long-standing community commitment. We are expanding our portfolio and global network, contributing towards the growth of the global economy and moving money for better. We believe in today’s world, access to financial services is a necessity rather than a luxury. We are proud to meet that need for so many consumers around the globe – because with the right tools, anyone can change their world. In 2013, Western completed 242 million consumer-to-consumer transactions worldwide, moving $82 billion of principal between consumers, and 459 million business payments. For more information, visit www.westernunion.com.


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