Last Updated on June 14, 2017, 11:47 a.m.
Project Greenback 2.0 Johor Bahru
Project Greenback 2.0 Johor Bahru is the product of a partnership between Bank Negara Malaysia (BNM) and the World Bank Group (WBG) to identify migrant workers’ financial
The project has been implemented with many partners including the City Council of Johor Bahru, the Malaysian Association of Money Services Business, the Embassy and Consulate General of Indonesia, the Association of Chinese Small and Medium Enterprises (SMEs) and plantation and remittance companies.
Since its launch in November 2015, a joint Greenback team from BNM and WBG has been engaging with migrant communities who are employed in Johor Bahru City and in plantations within a
Three things that came up as a result of the survey:
1. Income, savings and bank account ownership
Urban migrants earn 46% more than plantation workers and higher education levels are positively correlated with higher incomes. Nevertheless, beyond a secondary school education, migrant wages
The savings rate of plantation workers is 13% higher than that of urban workers, which can mainly be attributed to the lower cost of living in remote plantations.
The level of bank account ownership is low at 22% for plantation workers and 55% for urban workers. Certain workers cannot comply with the basic requirements to open a bank account due to a lack of proper documentation. For plantation workers, payment of wages in cash and the remoteness of their work locations most affect the level of bank account ownership. These make
Purchasing basic necessities to support dependents in the home country is the main reason for remittances which typically are sent on a monthly basis.
Generally, the transaction fee is 20 Ringgit or less. However, apart from this transaction fee, workers are less aware of the other remittance costs components, such as the foreign exchange cost and costs charged to the recipient.
Non-bank remittance service providers are the most popular regulated remittance channel used by
3. Use of information and communication technologies
Among the surveyed migrants, 74% own a
By issuing the Financial Technology (FinTech) Regulatory Sandbox Framework, BNM acknowledged FinTech as a catalyst for the development of progressive financial services. This framework allows regulatory flexibilities to be granted to financial institutions and FinTech companies to experiment with FinTech solutions in a live controlled environment for a limited period. Through this
Greenback 2.0 is an ongoing project in Malaysia where progress will be measured through yearly reports. Two additional reports are currently being developed – one which will measure the remittance
Last but not least, a Greenback 2.0 Pick Remit mobile application was developed which aims to create transparency in remittance prices on a global level. The app aims to help migrant workers make the best choice of services when sending money back home.
The impact of Greenback 2.0 in Johor Bahru has been substantial. Average remittance fees decreased by 40%, from 3.33% prior to December 2015 (Pre-Greenback 2.0) to 2.02% in December 2016. As a result, Malaysia is one of the cheapest remittance-sending corridors in the world today.
Thanks to this type of initiatives, the cost of sending remittances from Malaysia to
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