Foreign employment bond fails to attract migrant workers
KATHMANDU:
This year too foreign employment bond could not attract Nepali migrant workers due to scanty publicity.
The designated agents were not able to sell much of the foreign employment bond issued worth Rs 5 billion this April despite the attractive coupon rate of 10.5 per cent per annum.
“We have sold bonds worth Rs 4 million only,” said spokesperson of Nepal Rastra Bank, Bhaskar Mani Gyawali.
“There was not enough publicity of the bond to the targeted group so the migrant workers were not aware about the bond,” he explained.
The foreign employment bond — that will mature in June 2016 — were sold only to the Nepali citizens working in South Korea, Malaysia, the United Arab Emirates, Saudi Arabia and Qatar, through chosen agents.
Gyawali also pointed out that the migrant workers do not have much purchasing power. “They have a lot of financial obligations that need to be fulfiled with limited income so could not spare much in buying the bond,” he added.
The central bank has given licence to seven remitters to sell the bonds in five destination countries – South Korea, Malaysia, Qatar, Saudi Arabia and the United Arab Emirates. The designated institutions include Himalayan Bank, International Money Express (IME), Sewa Money Transfer, Prabhu Finance, Incentive Money Transfer, Shramik Remit Company and Prabhu Money Transfer.
The remitters also attribute the lack of publicity for the discouraging sales of the bonds. “There is not much awareness regarding the bond among the migrant workers abroad so sales have been scanty,” informed president of Nepal Remitters Association Chandra Dhakal.
Each year around 300,000 Nepalis leave for the foreign countries to work as migrant workers and, at present, there are more than two million Nepalis working in different destinations.
The estimated annual earning of these people is considered to be over Rs 400 billion.
According to a recent study of World Bank, Nepal is one of the top ten remittance receiving countries in the world as the country received $2.5 billion in the fiscal year 2009-10.
The government had announced foreign employment bonds — to tap these resources earned by migrant workers — that will help the migrant workers to divulge in risk free investment instrument from abroad and the government could also invest on infrastructure.
Moreover, it was considered to be an effective passage to divert the remittance coming in from informal channels to the formal.
In the last fiscal year, the agents were able to sell the first foreign employment bonds worth Rs 4.6 million of total issue that was worth Rs 1 billion at 9.5 per cent interest. Last year too, the central bank had attributed the delay in issuance of bonds and lack of proper publicity for the cold response.
The agents get the brokerage commission at the rate of 0.25 per cent of the total amount for mediating the primary sale of the bonds.
“The commission of 0.25 per cent is really less compared to the work that needs to be done to sell the bond,” Dhakal, said, adding that it might also have made the agents less enthusiastic in selling the bonds.
The government had brought the concept of foreign employment bond to channelise migrant workers hard earned money to the productive sectors.
Source: THT
This year too foreign employment bond could not attract Nepali migrant workers due to scanty publicity.
The designated agents were not able to sell much of the foreign employment bond issued worth Rs 5 billion this April despite the attractive coupon rate of 10.5 per cent per annum.
“We have sold bonds worth Rs 4 million only,” said spokesperson of Nepal Rastra Bank, Bhaskar Mani Gyawali.
“There was not enough publicity of the bond to the targeted group so the migrant workers were not aware about the bond,” he explained.
The foreign employment bond — that will mature in June 2016 — were sold only to the Nepali citizens working in South Korea, Malaysia, the United Arab Emirates, Saudi Arabia and Qatar, through chosen agents.
Gyawali also pointed out that the migrant workers do not have much purchasing power. “They have a lot of financial obligations that need to be fulfiled with limited income so could not spare much in buying the bond,” he added.
The central bank has given licence to seven remitters to sell the bonds in five destination countries – South Korea, Malaysia, Qatar, Saudi Arabia and the United Arab Emirates. The designated institutions include Himalayan Bank, International Money Express (IME), Sewa Money Transfer, Prabhu Finance, Incentive Money Transfer, Shramik Remit Company and Prabhu Money Transfer.
The remitters also attribute the lack of publicity for the discouraging sales of the bonds. “There is not much awareness regarding the bond among the migrant workers abroad so sales have been scanty,” informed president of Nepal Remitters Association Chandra Dhakal.
Each year around 300,000 Nepalis leave for the foreign countries to work as migrant workers and, at present, there are more than two million Nepalis working in different destinations.
The estimated annual earning of these people is considered to be over Rs 400 billion.
According to a recent study of World Bank, Nepal is one of the top ten remittance receiving countries in the world as the country received $2.5 billion in the fiscal year 2009-10.
The government had announced foreign employment bonds — to tap these resources earned by migrant workers — that will help the migrant workers to divulge in risk free investment instrument from abroad and the government could also invest on infrastructure.
Moreover, it was considered to be an effective passage to divert the remittance coming in from informal channels to the formal.
In the last fiscal year, the agents were able to sell the first foreign employment bonds worth Rs 4.6 million of total issue that was worth Rs 1 billion at 9.5 per cent interest. Last year too, the central bank had attributed the delay in issuance of bonds and lack of proper publicity for the cold response.
The agents get the brokerage commission at the rate of 0.25 per cent of the total amount for mediating the primary sale of the bonds.
“The commission of 0.25 per cent is really less compared to the work that needs to be done to sell the bond,” Dhakal, said, adding that it might also have made the agents less enthusiastic in selling the bonds.
The government had brought the concept of foreign employment bond to channelise migrant workers hard earned money to the productive sectors.
Source: THT
