4 Reasons for the fall in Remittance Income

December 2, 2019 | DWAIPAYAN REGMI

A recent stat indicates that remittance has been in a diminishing line. The proportion of remittance that Nepal received in the last year is seen to be higher than that of today’s rate. Remittance has been a prime source of income in today’s Nepal. In remote regions, at least one member of their house or family is abroad. They have all been working around and helping their families live their living through remittance.

Remittance is no way a long term solution for the country’s economy. But, as of now, remittance seems to be the only means of how the economy is surviving and sustaining in the Nepalese context. It is important to understand why remittance is getting towards a negative line in this particular period. After all, there certainly lies the reasons behind it. The following are the prime reasons for decreasing remittance (fall in remittance income).

1. Decreasing workforce flow

There was a time when the workers used to fly on an average of 1600 per day from Tribhuwan International Airport. However, as of now, the rate has been wide below. It is unknown why there is a fall in this rate – could be either because there Nepal has reached maturity level, or could be because with stability youths have been seeking alternatives within the nation. But, this downfall in the ratio of youths flying abroad has been one major reason why the rate of remittance is falling.

2. Foreign Saving and Investment

The data and the trend shows remittance outflow in third world nations like Australia, America, and the United Kingdom. From issues like ‘Education Fee’, till ‘Purchase of Real Estate’, these third world nations have been taking away the money from Nepal. Youths from gulf nations are the only ones who have turned liable for sending the funds regularly as they tend to settle back in Nepal in the long run, which reverses in big nations. As a result, youths, who migrated to third world nations have opted to go for saving and investment there itself than sending it back home.

3. Product Import/Gift

There is a rise in the practice of sending a gift to Nepal from these third world nations. From Apple-branded products, big Television sets to another wide number of gadgets – youths from these nations have been sending gifts constantly. These forms of gifts remain unidentified and stay off the record. These forms of gifts have been acting as a major indicator of why there is a huge downfall in entire remittances. After all, their family would be pleased through iPhone than cash.

4. Rise over Hundi

With the flow of youths, we can assume that the level of hundi has also grown up. This growing up of the Hundi trend is something of a different story. Evidence of few Hundi dealers caught within Kathmandu should be enough to prove that hundi transfer has been rising. These Hundis goes off the record as well and remained unidentified within formal channel means. As a result, the data shows its downfall. Meanwhile, those working in India prefer bringing cash than opting for fund transfer.


Had the flow of remittance been lowered because of productivity within the nation, or through entrepreneurship within Nepal – that would have been an appreciable move. Because remittance is certainly not a long term solution and the diminishing line should have been appreciated. However, this is not the case – but fall in remittance is because of the above-mentioned reasons and hence there is nothing to clap for. Above mentioned reasons, except for decreasing workforce flow are not appreciable. Hence, the economy should give serious thought to it. Else, for developing nations – the stories of struggle will remain for pretty long anyway.


Investopaper is a financial website which provides news, articles, data, and reports related to business, finance and economics.

Leave a Reply

Your email address will not be published.

error: Content is protected !!