Remittance
Candlefocus EditorGenerally, the senders of remittance are foreign workers, who are immigrants or expatriates. These individuals usually have families in their home country and send money back to them. The recipient of a remittance can often be an individual, such as a family member, or a collection of individuals, such as a small business.
Experts believe that remittances have an overall positive economic impact in many of the recipient countries. Since the money is sent to family members, it is often used to support necessary living expenses like food and rent payments. Additionally, remittances often create a positive multiplier effect. The one-time money sent through remittances creates an additional source of income for families, which in turn creates increased spending in their local economy.
However, some intelligence agencies are concerned that remittances might be used to fund terrorism. Intelligence agencies around the world have become more aware of this potential problem and are taking actions to identify and stop terrorism-funding-remittances. As a result, individuals who send remittances are being asked to use formal money transfer channels with enhanced compliance checks and due diligence measures to ensure that funds do not end up in the wrong hands.
In conclusion, remittances represent an important source of income for many millions of people in low-income and developing countries. Remittances help meet the day-to-day needs of families around the world, however, authorities are increasingly aware of the potential risk of misuse of remittance to fund terrorism and other criminal activities. As a result, individuals and organizations sending remittances are now being heavily scrutinized to make sure that funds are not being misused.