Print Edition - 2014-07-07 | Main News
Labour bank to reduce forced migration
- remittance management
Jul 6, 2014-
The government plans to open a labour bank in hopes of channelling the flow of remittance to development work and help reduce the rate of forced labour migration in the future.
According to Rudra Raj Kafle, executive director of the Foreign Employment Promotion Board, the bank will provide loans to migrant labourers at a low interest rate with their jobs as collateral. The financial institution will also lend capital and provide skill training to labourers’ families so that they can start a small business here.
This, the government believes, will not only manage the remittance cycle—by discouraging the hundi system, by lowering the cost of money transfer and by investing the remittance in national projects—it will also reduce social costs.
“If both the labour migrant and his/her family are able to take loans and manage their incomes through a reliable institution, the unnecessary tension between family members will be reduced and the family will remain intact,” says Kafle.
According to Nepal Rastra Bank, the country received Rs 444 billion in remittance in 10 months of the fiscal year 2013-14. Surveys, however, show that the money flowing into the country through the banking channel is only a fraction of the whole that comes also via other channels such as hundi and by person.
“A formal, professional channel like a labour bank will help reduce illegal and risky migration and the number of cases in which the employment agencies cheat migrants,” says Kafle.
The government plans to use the bank also as a welfare fund with a number of schemes to choose from. A number of banking institutions and non-profit organisations are already providing such services, but none at a massive, national scale.
The ultimate goal, however, is not just to make it easier and safer for labourers to migrate, but to give them an opportunity to invest in education and economic opportunities in their home country so that the next generation will not be forced to migrate for survival.
To that end, the labour bank will not be exclusive to labour migrants.
“The bank will provide loans to domestic labourers as well, both formal and informal. We want the bank to double as a provident fund for labourers in the country too,” says Ramesh Koirala, economic advisor to the Ministry of Labour and Employment. According to Koirala, the ministry plans to open the bank by the end of the fiscal year 2014/15.
Published: 07-07-2014 08:38