Repost: Would investing in financial literacy help reduce the use of informal channels?

Ibrahim Sirkeci, Ria Professor of Transnational Studies & Marketing at Regent’s University in London, UK, recently published a post on financial literacy on the World Bank’s People Move Blog, hosted by Dilip Ratha. An extract is being republished here with kind permission.

Ibrahim Sirkeci

Ibrahim Sirkeci, Ria Professor of Transnational Studies & Marketing at Regent’s University.

Would investing in financial literacy help reduce the use of informal channels?

Reducing remittance costs are recognized as a vital element of the financing for development strategy and is one of the targets in the Sustainable Development Goals and the Addis Ababa Action Agenda. However, studies show that remittances remain to be a private affair operating mostly at household level.

It is also expected that reduced costs would encourage use of formal channels such as banks and money transfer operators. There are increasingly more money transfer operators in the market offering lower costs among the mainstream MTOs and digital ones. Mobile phone companies and many small operators are also competing on costs. Dilip Ratha clearly puts the argument for reduced costs in his TED talk.

Continue reading the full post on the World Bank People Move Blog.