More Nepalis in South Korea are sending remittances through formal channelsRemittance firms are overwhelmed by foreigners wanting to send money home on Saturdays and Sundays.
When Khim Bahadur Aryal first reached South Korea under the Employment Permit System in 2013, he found it hard to send home money through the banking channel.
It used to take at least a week to send remittances to Nepal through a South Korean bank where migrant Nepalis were required to maintain two separate accounts for personal expenses in South Korea and for sending money home.
“So, hundi was the only way to send money home quickly,” said Aryal, who works in a big farm in Daegu city. Hundi is an informal/illegal form of remittance made through illegal channels.
With the proliferation in the number of remittance agencies in South Korea in recent years, he has been sending money to Nepal through his bank. “I send money home through money transfer agencies as they are now accessible.”
GME Remittance is one of the early companies established in South Korea to remit money to Nepal and other countries.
The company, which has signed an agreement with Nepal’s Global IME Bank, sees large queues of migrant workers who want to send home money, particularly on Saturdays and Sundays, the two holidays.
“Footfall is high and we hardly get time even to take food on Saturdays and Sundays,” said Amrita Shrestha, a staff of GME, deployed at Dongdaemun branch of the company.
A large number of Nepali migrant workers live and work in Seoul’s Dongdaemun area which is dotted with Nepali restaurants.
There are nearly 40,000 Nepali migrant workers in South Korea, most of them going there under the EPS system, according to the Nepali Embassy here.
GME was registered in South Korea in 2017 and there are over a dozen money transfer companies active in the country which help Nepalis to send money home, according to the Nepali Embassy in South Korea. “We also send mobile teams every two weeks to serve migrant workers in different areas,” said Shrestha.
Sunrise Bank has signed an agreement with South Korea’s Hanpass Remit to enable Nepalis to send money home to Nepal. In March 2020, Himalayan Bank signed another agreement with QS Remit company of South Korea for the same purpose.
Likewise, City Express Money Transfer company of Nepal has a deal with South Korea’s SBI Cosmoney.
Shrestha said the competition between money transfer agencies is growing.
“Most companies have been opened with the involvement of Nepalis but they are also helping the citizens of India, Bangladesh and Pakistan to send money home,” she said.
The Nepali Embassy in South Korea also has the impression that a growing number of Nepalis living in the east Asian country have been sending money home through formal channels in recent days.
“Recently, we had organised an orientation for Nepali migrant workers and many of them told us that they now use money transfer agencies,” said Chandrakala Chaulagai Oli, counsellor (labour) at the Nepali Embassy in South Korea.
Until a few years ago, South Korea was named as one of the countries from which the majority of remittances enter Nepal through hundi. As engaging in hundi is illegal in Nepal, how much money comes through it is not known.
In January 2017, Dustin Kerns, immediate Labor Migration Project Coordinator at the International Organization for Migration, Seoul, had told The Korea Times that the majority of Nepali migrant workers send money by using hundi.
“In Korea, over 80 percent of Nepali migrant workers use hundi to remit money,” he had said. But back then there were few remittance companies in South Korea.
Chaulagai said that along with increased use of formal channels by Nepali migrant workers, remittance from South Korea to Nepal has been growing.
“During a recent function here, a deputy director from the Nepal Rastra Bank said that the size of remittance Nepal got from South Korea was the sixth largest,” she said.
According to a Nepal Rastra Bank study report, Nepal had received Rs6.15 billion from South Korea during the first four months of fiscal year 2019-20. At the time, the east Asian country was 10th in terms of remittance sent to Nepal.
But Prakash Shrestha, chief of economic research department at the Nepal Rastra Bank, said that his department has not maintained country-specific data on remittance inflow.
“Because of access to formal channels, remittance inflows from South Korea might have gone up, but I cannot confirm it,” he told the Post.