Strengthen the links between migration, investment, financial services and development
The IPPMD findings show an insignificant or sometimes even negative relationship between remittances, return migration and investments. Remittances are not associated - either positively or negatively - with business or real estate ownership. In a context in which migration is largely a livelihood coping strategy, remittances are predominantly used for buying food, health care and repaying debts; they may not be large enough to be used for productive investment. Receiving remittances is also not associated with investment in other productive assets, such as non-agricultural land or real estate. Return migration is found to be negatively associated with business ownership.
On the other hand, it does seem as if owning a bank account has positive effects on remittance patterns. As well as being linked to greater amounts of remittances, having a bank account reduces the transfer of remittances through informal channels. Yet, bank use is very low in Cambodia, and many current and future remittance receivers lack access to formal bank accounts. Policies to increase access to bank accounts could hence stimulate the sending of remittances and channel remittances into formal financial institutions. This suggests the need to:
- • Promote entrepreneurship through the different phases of developing, starting and managing a business to help return migrants and remittance-receiving households to overcome investment barriers and stimulate more productive remittance investments.
- • Implement a national financial education programme to enhance the financial literacy of Cambodians in general and migrants and their families in particular to encourage more remittances to be channelled towards productive investments.
- • Reduce the number of Cambodians who are unbanked by expanding the presence of financial institutions and deliver financial services beyond more developed and urbanised areas to stimulate more formally sent remittances.