Overseas Pakistanis send $4bn back home
International money transfer transactions from Pakistanis resident in the UK and in order parts of the Pakistani diaspora have increased markedly over the past few months, new figures reveal.
According to data from the State Bank of Pakistan, the proportion of overseas Pakistanis sending money home increased by 23 per cent over the four months to October this year compared to the same four-month period last year.
Figures from the bank revealed that even though many Pakistanis are resident in countries that have felt the pinch of the global economic crisis as well as the eurozone debt troubles, they managed to send a combined figure of $4.32 billion (£2.78 billion) back to Pakistan between July and October.
In October alone, the amount of money sent back home by Pakistanis resident in the UK totalled $117.56 million.
According to Pakistan's central bank, the rise in the amount of money sent back home by Pakistanis resident abroad can be in part attributed to the country's Pakistan Remittance Initiative, which makes transferring money from abroad more attractive.
The Pakistan Remittance Initiative provides Pakistanis with financial incentives to transfer money through official routes rather than through the informal channels that have been increasingly gaining popularity in Pakistan, such as hundi or hawala.
These informal schemes work by clients paying money to a broker, who arranges for another broker in the recipient country to give the same amount of money to the beneficiary. Under these arrangements, which are to some extent based on trust, no money is actually transferred from country to country.
Speaking to the Washington Post, Shahid Kardar, former governor of the state bank, said: "Remittances this year will be at least $13 billion. And don't think we have reached a peak. There is still room to bring more money in the formal system."
On a yearly basis, remittances account for more than seven per cent of Pakistan's gross domestic product.