JOHOR BARU: The average cost of remitting funds in Johor Baru has been brought down to 2% from 3.3% over the past two years under a joint effort by the World Bank and Bank Negara Malaysia.
Bank Negara assistant governor Jessica Chew Cheng Lian said the 2% average cost was well below the target set by the United Nations Sustainable Development Goals of 3% by 2030.
She said the improvement was due to the inception of Project Greenback 2.0 in 2015.
Under the project, Johor Baru was chosen as the first remittance champion city in Asia and had reached out to 35,000 migrant workers and 3,700 small and medium enterprises (SMEs).
Chew added that more than 40 education and outreach programmes were conducted to increase awareness and promote the use of formal remittance services.
Following this, a 21% increase in value terms was recorded on an annual basis in authorised money services business (MSB) providers from January to October against the corresponding period in 2015.
“This has also led to better protection of customers while safeguarding the integrity of the country’s financial system,” she said at the project’s closing ceremony here.
Chew also witnessed the handover of the project to Kota Kinabalu as the next remittance champion city, selected for its significantly large migrant population.
She noted that barriers in the use of formal remittance channels were not due to access or cost.
“Many small businesses do not trust non-bank channels while for migrant workers, the idea of going to a formal business premises was intimidating.
“This led to us working on new ways to allow workers to conduct remittance through mobile channels and by bringing MSB services to the workplace.
“We found that workers were more comfortable in dealing with formal MSB companies face-to-face,” she said.
Chew added though the project had come to a close in Johor Baru, the momentum should not stop and efforts must continue to reach out to more migrant workers and SMEs.
Project Greenback 2.0 was an initiative of the World Bank to increase efficiency and transparency in the market for remittance and ultimately reduce the cost of such transactions.