| Title : | Impact of remittance on deposit of commercial banks' and economic growth of Nepal | | Material Type: | printed text | | Authors: | Ritu Malekoo, Author | | Publication Date: | 2015 | | Pagination: | 76p. | | Size: | GRP/Thesis | | Accompanying material: | 5/B | | General note: | Including bibilography | | Languages : | English | | Descriptors: | Economic history
Emigrant remittances
Emigration and immigration
Nepal
| | Keywords: | 'remittance economic history bank deposit banks banking' | | Class number: | 332.042 | | Abstract: | Remittances are becoming very important source of foreign financial flows, especially in developing countries, both in size and growth rate, exceeding the inflows of most forms of financial flows. The true size of remittances as well as unrecorded flows through formal and informal channels is believed to be significantly large (Gammeltoft, 2002). Recorded remittances are more than twice as large as official aid and nearly two-thirds of foreign direct investment (FDI) flows to developing countries. The most obvious and visible contribution of migrants to economies of origin is the money they send or bring home to family and friends (Massey et al., 1998). Workers’ remittances are the cash inflows coming from foreign countries as a result of foreign workers remitting or transferring money to their home (Dilshad, 2013). Remittances received by developing countries rose from US$ 55.2 billion in 1995 to US$226.7 billion in 2006 and US$325.5 billion in 2010 while remittance flows to developing countries are expected to reach US$540 billion by 2016 (Ratha et al. 2011).
The analysis of the impact of remittance on banks’ deposit and economic growth is extremely important, since an inflow of remittances has affected economic growth by reducing current account deficit, improving the balance of payment position and reducing dependence on external borrowing. Similarly, remittances are also believed to play an important role in the widening and deepening of the financial sector. Empirical studies showed in numerous endogenous growth models, that the surge of the remittances involves a liquidity increasing of the banks. Kunt et al. (2010) reveled that remittances are strongly associated with greater banking breadth (measured by number of branches and deposit accounts per capita) and depth (measured by the volume of deposits and credit to GDP).
This study is based on secondary data analysis. The study has used GDP per capita and total deposit as dependent variables and total remittances inflow, consumption, gross capital formation and import as independent variables. The data are collected from various secondary sources for the period of 1995- 2014. Likewise, regression and correlation analysis are used to examine the effects of remittances on banks’ deposit and economic growth of Nepal.
The study reveals that total remittances inflow has positive and significant effect on gross domestic product and total deposit of commercial banks’. The study also finds that consumption and gross capital formations have positive and significant impact on gross domestic product of the country. Similarly, the study also finds that gross capital formation have positive effect on total deposit of commercial banks’. Negative effect of import on gross domestic product has been observed. Similarly, consumption and import have a negative and significant effect on total deposit of banks’.
The recommendation by this study is that to bring recipients households into productive investment, control on imported goods and focus on export is only first step in using remittances more effectively. The study remains enough ground for future researcher in the same topic. The future studies can be carried out by conducting research using other different macroeconomic variables. |
Impact of remittance on deposit of commercial banks' and economic growth of Nepal [printed text] / Ritu Malekoo, Author . - 2015 . - 76p. ; GRP/Thesis + 5/B. Including bibilography Languages : English | Descriptors: | Economic history
Emigrant remittances
Emigration and immigration
Nepal
| | Keywords: | 'remittance economic history bank deposit banks banking' | | Class number: | 332.042 | | Abstract: | Remittances are becoming very important source of foreign financial flows, especially in developing countries, both in size and growth rate, exceeding the inflows of most forms of financial flows. The true size of remittances as well as unrecorded flows through formal and informal channels is believed to be significantly large (Gammeltoft, 2002). Recorded remittances are more than twice as large as official aid and nearly two-thirds of foreign direct investment (FDI) flows to developing countries. The most obvious and visible contribution of migrants to economies of origin is the money they send or bring home to family and friends (Massey et al., 1998). Workers’ remittances are the cash inflows coming from foreign countries as a result of foreign workers remitting or transferring money to their home (Dilshad, 2013). Remittances received by developing countries rose from US$ 55.2 billion in 1995 to US$226.7 billion in 2006 and US$325.5 billion in 2010 while remittance flows to developing countries are expected to reach US$540 billion by 2016 (Ratha et al. 2011).
The analysis of the impact of remittance on banks’ deposit and economic growth is extremely important, since an inflow of remittances has affected economic growth by reducing current account deficit, improving the balance of payment position and reducing dependence on external borrowing. Similarly, remittances are also believed to play an important role in the widening and deepening of the financial sector. Empirical studies showed in numerous endogenous growth models, that the surge of the remittances involves a liquidity increasing of the banks. Kunt et al. (2010) reveled that remittances are strongly associated with greater banking breadth (measured by number of branches and deposit accounts per capita) and depth (measured by the volume of deposits and credit to GDP).
This study is based on secondary data analysis. The study has used GDP per capita and total deposit as dependent variables and total remittances inflow, consumption, gross capital formation and import as independent variables. The data are collected from various secondary sources for the period of 1995- 2014. Likewise, regression and correlation analysis are used to examine the effects of remittances on banks’ deposit and economic growth of Nepal.
The study reveals that total remittances inflow has positive and significant effect on gross domestic product and total deposit of commercial banks’. The study also finds that consumption and gross capital formations have positive and significant impact on gross domestic product of the country. Similarly, the study also finds that gross capital formation have positive effect on total deposit of commercial banks’. Negative effect of import on gross domestic product has been observed. Similarly, consumption and import have a negative and significant effect on total deposit of banks’.
The recommendation by this study is that to bring recipients households into productive investment, control on imported goods and focus on export is only first step in using remittances more effectively. The study remains enough ground for future researcher in the same topic. The future studies can be carried out by conducting research using other different macroeconomic variables. |
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