Channel of remittances — A micro level study

This study was conducted to review the existing remittance channels in transferring remittance money from abroad to selected areas of Bangladesh. The study is based on carefully collected primary level data from forty-three villages of Habiganj district. The sample of the study consisted of 100 migrant workers - 40 from England, 32 from Saudi Arabia and 28 from Malaysia. Findings showed that the advantages of the Hundi system over the bank draft in terms of time taken, security and costs involved (per remittance) attracted most of the migrant workers to remit their savings through Hundi. Its main attraction is speed and this becomes important under certain circumstances (e.g. like emergencies). It is also found that out of total remittances more than 90% of these remittances comprised cash remittances. Delay in encashing cheque, high commission/taxes compared to informal channels and unawareness about formal channels were the major problems associated with remittance transfer to Bangladesh. More consciousness of the migrant workers as well as the timely government intervention could minimize some of these problems