Investment is not being boosted by migration
Despite the large amounts of remittances flowing into Cambodia, the research finds that these funds are not being invested productively (other than in education). This is a major missed opportunity for a country that is rebuilding much of its capital stock. Similarly, return migration does not seem to boost investments either: households with a return migrant spend less on agriculture assets and are less likely to run a business than households without a return migrant. Policies to support and enable households to channel remittances towards productive use, and measures that stimulate investments by return migrants, would not only benefit the household, but also the entire country’s development.
Do sectoral policies explain this low investment rate for remittances? Financial inclusion - e.g. having a bank account - is key for channelling remittances towards productive investment; it also affects the amount of remittances received and encourages them to be transferred through formal channels. Yet, bank use is very low in Cambodia, meaning that many current and future remittance receivers do not possess a bank account. Furthermore, participation in financial training programmes is very low among migrant and non-migrant households alike, despite non-government and government initiatives to implement them. There is scope to expand the access to bank accounts and financial training programmes among households in order to encourage more remittances to be sent through formal channels and to enable households to make productive investments.