Expat remittances from UAE drop 5% to Dh156.8B as outflow to India falls 15.6%

Dubai - Growing economic activities will result in rise in demand for workers and in turn increase requirement for remittance services: Al Ansari Exchange CEO

The value of the annual remittances of expatriates to their countries from the UAE — the world’s second top-remitting country after the US — declined by five per cent or Dh8.3 billion to Dh156.8 billion in 2020 as the foreign exchange industry worldwide recorded a seven per cent decline.

India, which has an expat population of 3.4 million in the UAE, retained its position as the top remittance destination of the Emirates, claiming 33.6 per cent of the total outflow or Dh52.58 billion, followed by Pakistan (11.9 per cent) and the Philippines (6.7 per cent).

In 2020, remittances from the UAE to India recorded a sharp 15.6 per cent decline compared to 2019 following the repatriation of more than a million expatriates due to pandemic-induced job losses, according to the World Bank. In 2019, UAE expats remitted Dh165 billion to their home countries.

Globally, the US with a migrant population of 50.6 million was the main source country for remittance outflow (Dh250 billion) in 2020, followed by the UAE (8.7 million migrants), Saudi Arabia (13.5 million migrants; Dh127 billion), Switzerland (Dh102.6 billion), and Germany (15.8 million migrants; Dh80.8 billion.

Rashed A. Al Ansari, CEO of Al Ansari Exchange, said a total of Dh113 billion was remitted last year in the country through exchange companies, while Dh43.8 billion was transferred abroad via banks. “While the share of exchange houses declined sharply by 18.1 per cent, banks boosted their remittance business by 9.8 per cent thanks to their advantage in online money transfer,” he added.

“The pandemic is not over, but we are optimistic that the money exchange sector will witness around 2.4 per cent growth this year due to several factors, including the gradual lifting travel restrictions, which we expect to continue with the rollout of the vaccine, the return of spending levels to normalcy and the growing economic activities fuelled by the implementation of key domestic projects and investment initiatives. These projects and new investments will result in a rise in demand for workers and in turn increase the requirement for remittance services,” Al Ansari said at a media briefing.

Also present was Al Ansari Exchange deputy CEO Mohammad Bitar.

“In addition to that, Expo 2020 is expected to drive the country’s foreign exchange and remittance sector further with foreign investments and capital flows into the local market, said Al Ansari. “The amendments to the commercial companies law are also a positive development for the economy as a whole and our industry in specific, as promoting 100 per cent foreign ownership onshore will drive new investors and investments into the country.”

Al Ansari said the outlook for the remittance industry is getting bright with a 1.5 per cent surge in 2021. “We are hopeful of recording a growth of 2.6 per cent as we increase our branch network from 199 to 210 by the end of this year.”

Bitar said Al Ansari Exchange saw a significant surge in its digital transactions in 2020. “The customer base across our digital channels increased by more than 212 per cent compared to 2019, with our mobile app accounting now for more than 14 per cent to our overall remittance transactions.”

He added that the company had a positive remittance performance in 2020. It transferred a total of Dh40.2 billion and gained a 36 per cent market share among other exchange companies. “After taking into account the outward personal remittances transferred via banks in the UAE of Dh43.8 billion combined, our company had 26 per cent share of the total remittances sent from the UAE in 2020,” he added.

— issacjohn@khaleejtimes.com