Developing Countries: Debts

International Development written question – answered at on 10 January 2011.

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Photo of Harriet Harman Harriet Harman Shadow Secretary of State for International Development, Shadow Deputy Prime Minister and Shadow Secretary of State for Culture, Media and Sport, Deputy Leader of the Labour Party

To ask the Secretary of State for International Development what steps he is taking to support the G8 objective to reduce the global average cost of transferring remittances from 10 per cent. to five per cent. over the next five years in respect of developing countries.

Photo of Andrew Mitchell Andrew Mitchell The Secretary of State for International Development

The Department for International Development (DFID) is currently working with the specialist microfinance organisation CGAP (the Consultative Group to Assist the Poor) and the Bill and Melinda Gates Foundation to explore and demonstrate ways of using technology, such as mobile phones, to transfer remittances more cheaply, quickly and safely. We plan to conduct at least eight feasibility studies and three pilot projects by 2014.

DFID is also supporting remittances programmes in several developing countries directly. For example, DFID has supported the Bangladesh Government's Remittance Payments and Partnership (RPP) Project, which is helping to drive down transfer costs. The RPP has contributed to reductions of some 50% that have occurred on transfers between Saudi Arabia and Bangladesh. DFID is also working with the FinMark Trust to reduce the average cost of transferring remittances from South Africa to five other Southern Africa Development Community countries by at least 30% by 2014. In Pakistan, DFID supports the State Bank's Remittance Initiative which is working to facilitate the cheaper and faster transfer of remittances. Going forward, we will continue to explore opportunities to support the G8 cost reduction objective.

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