Strengthening remittance through safe money transfers

Behind scenic selfies and videos of people living abroad, there lie untold struggles of theirs. The tireless work of the migrants supports their families back home, and for countries like Bangladesh, their remittances are becoming vital to survival.

Bangladesh is no newcomer to the global migrant workforce. Over 13 million Bangladeshis reside abroad, and the country ranks among the top exporters of migrant workers. It is also the largest supplier of foreign reserves. In 2024, Bangladesh banked over US$26 billion in remittances.

Nearly one million workers secured overseas employment. Behind these, most of this money is spent on household chores, children's education, rebuilding houses destroyed by floods, and keeping small and medium-sized enterprises (SME) afloat.

While remittance is one of the key sources of Bangladesh's economy, invisible actors who profit often control the channels. They rule the unregulated money transfer network and can siphon off nearly 60% of remittance flows. To many migrants, especially those in Gulf countries, hundi appears quicker and more convenient. Yet beneath the simplicity, there lies a darker reality. What makes this practice even worse is that it remains obscure to the public eye. For most families, receiving money at a better rate is all that matters, regardless of whether it disrupts the supply-demand balance or undermines the formal economic framework.

On the other hand, the brokers, agents, and illicit financiers run a covert syndicate to streamline this goldmine. They profit from exchange rate manipulation, evade taxes, and operate without accountability due to oversight and lack of regulation. Meanwhile, the nation silently loses billions in foreign reserves, and banks struggle to reflect the accurate scale of the diaspora's contribution. What looks like an ordinary money transfer is part of a much larger financial undercurrent, shaping the economy from the shadows.

Last year, it was reported that 5,005 MFS agents were involved in fraudulent transactions through hundi, gaming and betting, forex trading, and crypto deals amid a surge in decentralised finance. Some hidden costs become apparent only after the money is received by the recipients. In the same year, Bangladesh lost $1.3 billion in remittance fees, averaging $9.40 per $100, triple the rate from 2021. This includes $3 in transaction fees and a $6.30 loss due to inflated foreign exchange margins. These excess charges led to $1.3 billion loss alone, which also depletes funds meant for families. This invisible network controlling these flows triggers a considerable gap in the ecosystem with endless loopholes.

This is where the legal remittance channels contribute, and services like NALA can be a safer alternative. This digital platform in Bangladesh comes with zero-fee transactions and top exchange rates. Moreover, NALA's integration with bKash, Nagad, and other mobile financial services makes the service faster and easier. Such legal channels safeguard the sender and receiver and boost the nation's economy. Enhancing foreign currency reserves, optimizing credit ratings, and aiding the country's healthy balance of payments.

However, obstacles persist. Bulks of paperwork, lack of digital literacy, and many other issues pose challenges for both senders and recipients. Many migrants, especially those from the Gulf, remain ignorant or find the documentation process burdensome. On the home front, hefty fees are charged for withdrawing money, and uneven access to banking services still prevails.

Legal remittance is fundamentally more than just transferring money. It represents the hardship of our migrant workers, and their contribution becomes a part of sustainable development for the nation. Therefore, strengthening our legal channels is the only way to uphold the diaspora community and support their nation-building efforts.

The writer is ethnically from Sylhet, helped launch Nala for the Bangladeshi immigrants in 2025.