New remittance record in March

Last December, for the first time in a decade of data collated by the Bank of Jamaica, BOJ, remittance inflows to Jamaica topped US$300 million in one month.

Then in March, a new record was set, with US$327.5 million of inflows, continuing the robust performance seen for money transfers across borders under the pandemic, after an initial but shortlived dip in flows.

March also set a new record for net remittances, that is inflows less outflows of foreign exchange remitted from Jamaica to destinations overseas, which was estimated at US$305 million.

Still, remittance operators are cautioning that the market is unlikely to continue growing at its current robust pace – transfers were up 65 per cent for the month of March year on year and 42 per cent for the January-March quarter – once the economic winds shift.

GraceKennedy, which has been recording spikes in its remittance business in line with industry data, has credited some of the upswing to the convenience and availability of online remittance platforms.

“In fact, we are tracking ahead of the total market inflows, as published by the BOJ. We continue to be market leaders in terms of market share of remittance companies,” said GraceKennedy CEO Don Wehby on Friday.

“We expect remittance inflows will continue to grow, however, as remittances run countercyclical to the economy, as market conditions become more favourable, the rate of growth may be slower than we have seen over the last year,” he said.

Meanwhile, under the conglomerate’s company’s programme to increase its digital footprint, GK is developing a digital remittance product, but Wehby offered no details on the initiative and its roll-out date. The conglomerate, which is the regional agent for Western Union, also launched electronic direct-to-bank services in Guyana and electronic registration offering in both Trinidad and Guyana, recently, he said.

Jacinth Hall-Tracey, president of the Jamaica Money Remitters Association and head of Lasco Financial Services Limited, has added to the mix of market drivers for remittances the issuance of additional stimulus checks in the United States, lower remittance fees, and the diaspora’s need to support their families at home amid rising food prices and a slow economic recovery.

“Several variables are accounting for increased remittances, one of which is that tax refunds are due in March and additional stimulus checks this year,” Hall-Tracey said.

The United States continues to dominate as source market for Jamaican remittances, accounting for more than 72 per cent of inflows in March, followed by the United Kingston at 11.2 per cent, Canada at 8.4 per cent, and The Cayman Islands at 4.7 per cent.

Remittance inflows between January and March totalled US$804 million, up from US$565 million in the similar period in 2020.

Jamaican remittances set a new annual record last year, with inflows of more than US$2.9 billion for the calendar year.

The six primary remittance agents in Jamaica operate 497 locations, up from 482 a year earlier, according to BOJ, which regulates the market.

karena.bennett@gleanerjm.com