Responsible Finance Forum

Remittances and Financial Inclusion: A Demand-Side Analysis of Low-Income Jordanians and Syrian Refugees in Jordan

Nadine Chehade, Antoine Navarro and Danielle Sobol

Remittances volumes to low- and middle income developing countries have a potentially large development impact because they are three to four times bigger than official development assistance and more stable than foreign direct investment. They are projected to reach US$450 billion in 2017 (KNOMAD 2017). On such important volumes, the slightest decrease in transaction cost amounts to millions more channeled to end recipients. Over recent years, the global average cost for sending remittances has stuck at around 7 percent of the amount sent, still far from the goal of 3 percent by 2030 that is envisioned by the Sustainable Development Goal to “reduce inequality within and among countries.” Understanding remittances behavior and designing adapted, innovative, and low cost remittances services have thus become important issues for both financial inclusion and economic development. In this environment, CGAP and GIZ initiated research in 2016 to assess the potential for digitizing domestic and international person-to-person (P2P) remittances as part of the broader Digi#ances project. Jordan has long been a net receiving country, with inbound remittances representing 11.3 percent of GDP in 2016 (Verme et al. 2016). The protracted Syrian conflict and its uncertain resolution suggested remittances could be an important mechanism of family support. GIZ and CGAP sought to inform development interventions aimed at improving access to financial services for low-income Jordanians and Syrian refugees living in Jordan.