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Wednesday, May 29, 2013

South Asians rely on informal money transfers: Gallup

Nearly six in ten adults in the South Asian region and Indonesia sent or received a payment or remittance in 2012 with a majority doing so informally, according to a new Gallup study.

In terms of hard numbers 800 million South Asians and Indonesians transferred money with 512 million people sending or receiving cash in person or sending it informally in some other way, according to the study funded by the Bill & Melinda Gates Foundation.
 
Remittances or payments could have been domestic or international; sent to friends or family, a school, or other institution; or received from the government, a non-government employer, or from the sale of crops, produce, or livestock.
 
Sri Lanka and Indonesia had the highest number of respondents reporting such payment or remittance activity, at 84 percent and 83 percent, respectively, in the 12 months before the survey.
 
Those in Afghanistan were the least likely to report these types of transactions, with 46 percent responding that they had either received or made a money-based transaction.
 
About three in 10 South Asian and Indonesian respondents (32 percent) made at least one payment to a school, company, or other institution, making this type of payment the most common across all transaction types surveyed.
 
The majority of these school/company/institution transactions were cash only (84 percent) in nature, and Sri Lankans (60 percent) and Indians (57 percent) led in conducting these types of transactions.
 
There is thus a largely untapped market of 512 million people in South Asia and Indonesia who currently conduct informal cash-based transactions, the study concluded.
 
That people are frequently using options to transfer money with inherent risk illustrates the importance of providing safer, better options to transfer money, it said.
 
Noting that 83 percent of survey respondents have access to a mobile phone, the study concluded that mobile-based banking options may be a prime target for increasing formal transactions, the study said.
 
With only six percent having access to Internet, Internet-based banking options or transfer capabilities only have the potential to reach a small segment of the highest educated and wealthiest of the population at this time, Gallup said.
 
Results are based on face-to-face interviews with 1,000 adults, aged 15 and older, conducted September-October 2012, in five South Asian countries and Indonesia, plus 2,540 adults in India.
 
IANS