Kuwait Is The Sixth-largest Sender Of Outward Remittances

In its 'Global Money Transfer Index', Western Union, the US-based multinational financial services company, revealed Kuwait to be the sixth largest source of outward remittances.

In 2021, Kuwait remitted $18.5 billion to the world, while inflows reached $27 million, according to World Bank data. According to the report, 63 percent of Kuwaiti residents send money transfers at least once a month, and 69 percent increased the value of the transfers due to rising living costs.

Kuwait launched Vision 2035 as a strategy for digital transformation to diversify its economy and embrace the Fourth Industrial Revolution. Kuwait's Central Bank announced in 2022 that the Gulf's digital payment systems are in full swing, with many financial institutions joining the system.

In order to enhance efficiency and develop cross-border payments, the system was launched. More than six senders of remittances (63 percent) and four recipients of remittances (38 percent) use the money transfer service at least once a month for every ten people. At present, 40 percent of senders prefer to use online-only or individual/business money transfer services, while 34 percent use comprehensive digital services.

Digital participation in Kuwait is hindered by several factors, including a preference for face-to-face interactions (31 percent); poor customer service (14 percent); and a lack of trust (14 percent). As a result, 49 percent of respondents want a range of online and in-person conversion options in the future, compared to 34 percent who said they would fully embrace all digital channels.

Moreover, only 42 percent of those who receive money currently use digital transfers to collect money, suggesting that they need more convincing. Only 18 percent say they would prefer a full range of options in the future, while 49 percent believe the option should be available.

However, more than a third of senders (37 percent) transfer funds to support family members, and this rises to 43 percent for those aged 25 to 44. A major reason for 19 percent of recipients collecting money was family financial assistance.

The universal cost of living crisis affects consumers, and 69 percent of senders say it forces them to transfer more money to recipients. The senders also feel the pinch, with 63 percent saying the cost of living makes it difficult to send money as frequently.

Approximately six out of every 10 people on the planet live in the Middle East and Asia Pacific region, and it is the center of gravity for the remittance industry. The majority of those who receive remittances in the world live in these markets, which include six of the eight largest countries receiving remittances. The two regions also represent nine of the top 20 remittance-sending countries.

Consumers reported that remittances play an important role in future financial planning even though they are mainly used to support families. Educational expenditure is the second most important reason for money transfers. Other essential reasons for transfers included supporting home business needs and saving for the future.

 

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