Effect of remittance inflows on economic growth of Nepal / Shritika Swar 

Public ISBD Title : Effect of remittance inflows on economic growth of Nepal Material Type: printed text Authors: Shritika Swar, Author Pagination: 104p. Size: GRP/Thesis Accompanying material: 9/B Languages : English Descriptors: Remittances Class number: 332.450 Abstract: In a general term, remittance is money transferred by migrant workers or remitters from host countries to their home countries to support their families. Remittance also refers to the concept of a monetary payment transferred by a customer to a business from one place to another (Mafruhah et al., 2012). Based on its size and impact on the world economic system, it is considered as one of the major sources of incomes. Remittance inflows works as a facilitator for achieving sustained economic growth. Many developing countries like Nepal are becoming more progressively reliant on remittances as it has played an important role to uphold economic growth and development in these countries. Remittance allows workers to support their families and relatives during financial crisis and natural calamities (Orozco &Fedewa, 2006). Buch & Kuckulenz (2010) found that remittances are positively related to welfare enhancing effect, such as capital investment, consumption, education and health. Inflow of remittances affects economic growth positively by reducing current account deficit, improving the balance of payment position and reducing dependence on external borrowing (Iqbal & Sattar, 2005). In the context of Nepal, Pradhan et al. (2008) found that remittance and economic growth are directly associated with each other. Moreover, Gaudel (2006) pointed out remittance as a major source of foreign currency to the developing nation and it has become a substantial component of making current account surplus in the balance of payments. Thus, the study further elaborated that remittance is typically helpful to meet specific needs of the respondents’ family members and thus tend to increase their standard of living. The major purpose of this study is to analyze the remittance inflows and its effects on the economic growth. Specifically, it examines the effect of remittance inflows, consumption, import, gross capital formation and foreign direct investment on the economic growth of Nepal. The results in the prior studies on foreign remittances and economic growth of a nation are mixed and unclear. Hence, this study has been conducted to get clear idea of the effects of remittance inflows on the economic growth in the context of Nepal. This study is based on secondary sources of data that are collected from1995/96 to 2014/15, leading to a total of 20 observations. The data are collected from the reports published by World Bank, different issues of Economic Survey published by Ministry of Finance and Quarterly Economic Bulletin published by Nepal Rastra Bank. The study has used GDP and per capita GDP as dependent variables and remittance inflows, consumption, gross capital formation, import and foreign direct investment as independent variables. Likewise, the study relies on descriptive and causal comparative research designs. The study shows that the remittance inflows, consumption, import, gross capital formation and foreign direct investment have positive relationship with the gross domestic product. It indicates that increase in remittance inflows and foreign direct investment leads to increase in gross domestic product. Likewise, increase in consumption, import and gross capital formation leads to increase in gross domestic product. Similarly, the result shows that remittance inflows, consumption, import, gross capital formation and foreign direct investment have positive relationship with the per capita GDP. It indicates that increase in remittance inflows, consumption and import leads to increase in per capita GDP. Similarly, increase in gross capital formation and foreign direct investment leads to increase in per capita GDP. The regression results show that the beta coefficients for remittance inflows and foreign direct investment are positive with per capita GDP. Likewise, the beta coefficients for gross capital formation and foreign direct investment are positive with gross domestic product. The study concludes that remittance is the significant source of GDP and per capita GDP. The recommendation put forward by this study is that in order to achieve higher and better economic growth, the country should increase the remittance inflows and use them more effectively in a productive sector. At the same time, foreign direct investment, gross capital information, import and consumption, should also be increased which will result into higher economic growth of the nation. The major limitation of this study is that this study has excluded some bank macroeconomic variables that might influence on performance evaluation of banks. The study remains enough ground for future researcher in the same topic. The future studies can be carried out by selecting other different macroeconomic variables to grab the wider view of effects of remittances. Effect of remittance inflows on economic growth of Nepal [printed text] / Shritika Swar, Author . - [s.d.] . - 104p. ; GRP/Thesis + 9/B. Languages : English Descriptors: Remittances Class number: 332.450 Abstract: In a general term, remittance is money transferred by migrant workers or remitters from host countries to their home countries to support their families. Remittance also refers to the concept of a monetary payment transferred by a customer to a business from one place to another (Mafruhah et al., 2012). Based on its size and impact on the world economic system, it is considered as one of the major sources of incomes. Remittance inflows works as a facilitator for achieving sustained economic growth. Many developing countries like Nepal are becoming more progressively reliant on remittances as it has played an important role to uphold economic growth and development in these countries. Remittance allows workers to support their families and relatives during financial crisis and natural calamities (Orozco &Fedewa, 2006). Buch & Kuckulenz (2010) found that remittances are positively related to welfare enhancing effect, such as capital investment, consumption, education and health. Inflow of remittances affects economic growth positively by reducing current account deficit, improving the balance of payment position and reducing dependence on external borrowing (Iqbal & Sattar, 2005). In the context of Nepal, Pradhan et al. (2008) found that remittance and economic growth are directly associated with each other. Moreover, Gaudel (2006) pointed out remittance as a major source of foreign currency to the developing nation and it has become a substantial component of making current account surplus in the balance of payments. Thus, the study further elaborated that remittance is typically helpful to meet specific needs of the respondents’ family members and thus tend to increase their standard of living. The major purpose of this study is to analyze the remittance inflows and its effects on the economic growth. Specifically, it examines the effect of remittance inflows, consumption, import, gross capital formation and foreign direct investment on the economic growth of Nepal. The results in the prior studies on foreign remittances and economic growth of a nation are mixed and unclear. Hence, this study has been conducted to get clear idea of the effects of remittance inflows on the economic growth in the context of Nepal. This study is based on secondary sources of data that are collected from1995/96 to 2014/15, leading to a total of 20 observations. The data are collected from the reports published by World Bank, different issues of Economic Survey published by Ministry of Finance and Quarterly Economic Bulletin published by Nepal Rastra Bank. The study has used GDP and per capita GDP as dependent variables and remittance inflows, consumption, gross capital formation, import and foreign direct investment as independent variables. Likewise, the study relies on descriptive and causal comparative research designs. The study shows that the remittance inflows, consumption, import, gross capital formation and foreign direct investment have positive relationship with the gross domestic product. It indicates that increase in remittance inflows and foreign direct investment leads to increase in gross domestic product. Likewise, increase in consumption, import and gross capital formation leads to increase in gross domestic product. Similarly, the result shows that remittance inflows, consumption, import, gross capital formation and foreign direct investment have positive relationship with the per capita GDP. It indicates that increase in remittance inflows, consumption and import leads to increase in per capita GDP. Similarly, increase in gross capital formation and foreign direct investment leads to increase in per capita GDP. The regression results show that the beta coefficients for remittance inflows and foreign direct investment are positive with per capita GDP. Likewise, the beta coefficients for gross capital formation and foreign direct investment are positive with gross domestic product. The study concludes that remittance is the significant source of GDP and per capita GDP. The recommendation put forward by this study is that in order to achieve higher and better economic growth, the country should increase the remittance inflows and use them more effectively in a productive sector. At the same time, foreign direct investment, gross capital information, import and consumption, should also be increased which will result into higher economic growth of the nation. The major limitation of this study is that this study has excluded some bank macroeconomic variables that might influence on performance evaluation of banks. The study remains enough ground for future researcher in the same topic. The future studies can be carried out by selecting other different macroeconomic variables to grab the wider view of effects of remittances.

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Relationship between remittance and credit disbursement of the banking sector in Nepal / Srijana Neupane

Public ISBD Title : Relationship between remittance and credit disbursement of the banking sector in Nepal Material Type: printed text Authors: Srijana Neupane, Author Publication Date: 2017 Pagination: 54p. Size: GRP/Thesis Accompanying material: 8/B Languages : English Descriptors: Emigrant remittances Class number: 332.450 Abstract: Remittances are the major sources of foreign exchange earnings and important implications for the remittances-recipient countries because of their increasing volume. The inflow of remittances being a prime source of foreign currency and thereby a contribution to the national economy plays a significant role in the context of the developing nations. The link between remittances, financial development, economic growth and poverty alleviation is an important issue for the remittances dependence countries. Development of the banking sector reducing the transaction costs that might motivate the investor to invest in different investment projects with high rate of return and increases the economic growth of the country. Remittances affect banking services, processing fees and transactions costs. The potential to collect these fees might induce banks to expand their outreach, locate close to remittance recipients and increase their demands for banking services, since banks offer households a safe place to store the temporary excess cash. Entrepreneurs in developing countries confront much less efficient credit markets and available evidence indicates that access to credit is among their biggest concerns (Paulson et al., 2000). 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 major objective of the study isto examine the relationship between remittance and credit disbursement of banking sector in Nepal. The study is based on the secondary data of 20 Nepalese commercial banks for the period of 2008/09 to 2014/15 with a total of 140 observations. The main source of data include various issues of Banking and Financial Statistics, Quarterly Economic Bulletin, Bank Supervision Report published by Nepal Rastra Bank and Annual Reports of selected commercial banks. The pooled cross sectional data analysis has been undertaken in the study. The research design adopted in this study is descriptive statistics, correlation analysis and regression analysis as it deals with the relationship between remittance and credit disbursement of banking sector in Nepal. The result shows that the average total loan is highest for ADBL (Rs.49 billion) and lowest for NMB (Rs.0.77 billion). The average non-performing loan is highest for NBB (9.51 percent) and lowest for EBL (0.53 percent). The average total deposit is highest for RBB (Rs. 91.43 billion) and lowest for LBL (Rs. 10.99 billion). The average total size is highest for RBB (Rs.112.46 billion) and lowest for LBL (Rs. 12.62 billion). The average ROA is highest for ADBL (3.06 percent) and lowest for MBL (0.61 percent). The average interest rate is highest for ADBL (11.95 percent) and lowest for SCBL (6.89 percent). The remittance is highest in year 2015 (Rs. 617 billion) and lowest in year 2009 (Rs.209 billion). The GDP growth rate is highest in year in 2014 (5.4 percent) and lowest in 2015 (3.9 percent). The inflation rate is highest in year 2009 (11.1 percent) and lowest in year 2015 (7.2 percent). The descriptive analysis shows that the average total loan and non-performing loan is Rs.24.94 billion and 2.53 percent respectively. Similarly, the descriptive result shows that the average remittance, total deposit, total size, return on assets, interest rate, GDP and inflation is Rs.378.54 billion, Rs.35.14 billion, Rs.44.39 billion, 1.81 percent, 9.76 percent, 4.26 percent and 9.26 percent respectively. The study shows that there is positive relationship of remittance, total deposit, total size, and return on assets withtotal loan. Similarly, Interest rate, GDP and Inflation have negative relationship with total loan. Likewise, the study shows thatthere is negative relationship of remittance and GDP withNPL. Similarly, total deposit and total size have positive relationship with NPL. However, the interest rate and ROA have positive relationship with NPL. Likewise, there is positive relationship between inflation and NPL. The regression analysis shows that remittance has significant positive impact on total loan. Similarly, total deposit, total size, ROA have significant positive impact on total loan. Likewise, interest rate and inflation have negative impact on total loan. However, remittance has significant negative impact on NPL. Similarly, interest rate has significant positive impact on NPL. Likewise, total size, ROA and GDPhave negative impact on NPL. Inflation has positive impact on NPL. Relationship between remittance and credit disbursement of the banking sector in Nepal [printed text] / Srijana Neupane, Author . - 2017 . - 54p. ; GRP/Thesis + 8/B. Languages : English Descriptors: Emigrant remittances Class number: 332.450 Abstract: Remittances are the major sources of foreign exchange earnings and important implications for the remittances-recipient countries because of their increasing volume. The inflow of remittances being a prime source of foreign currency and thereby a contribution to the national economy plays a significant role in the context of the developing nations. The link between remittances, financial development, economic growth and poverty alleviation is an important issue for the remittances dependence countries. Development of the banking sector reducing the transaction costs that might motivate the investor to invest in different investment projects with high rate of return and increases the economic growth of the country. Remittances affect banking services, processing fees and transactions costs. The potential to collect these fees might induce banks to expand their outreach, locate close to remittance recipients and increase their demands for banking services, since banks offer households a safe place to store the temporary excess cash. Entrepreneurs in developing countries confront much less efficient credit markets and available evidence indicates that access to credit is among their biggest concerns (Paulson et al., 2000). 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 major objective of the study isto examine the relationship between remittance and credit disbursement of banking sector in Nepal. The study is based on the secondary data of 20 Nepalese commercial banks for the period of 2008/09 to 2014/15 with a total of 140 observations. The main source of data include various issues of Banking and Financial Statistics, Quarterly Economic Bulletin, Bank Supervision Report published by Nepal Rastra Bank and Annual Reports of selected commercial banks. The pooled cross sectional data analysis has been undertaken in the study. The research design adopted in this study is descriptive statistics, correlation analysis and regression analysis as it deals with the relationship between remittance and credit disbursement of banking sector in Nepal. The result shows that the average total loan is highest for ADBL (Rs.49 billion) and lowest for NMB (Rs.0.77 billion). The average non-performing loan is highest for NBB (9.51 percent) and lowest for EBL (0.53 percent). The average total deposit is highest for RBB (Rs. 91.43 billion) and lowest for LBL (Rs. 10.99 billion). The average total size is highest for RBB (Rs.112.46 billion) and lowest for LBL (Rs. 12.62 billion). The average ROA is highest for ADBL (3.06 percent) and lowest for MBL (0.61 percent). The average interest rate is highest for ADBL (11.95 percent) and lowest for SCBL (6.89 percent). The remittance is highest in year 2015 (Rs. 617 billion) and lowest in year 2009 (Rs.209 billion). The GDP growth rate is highest in year in 2014 (5.4 percent) and lowest in 2015 (3.9 percent). The inflation rate is highest in year 2009 (11.1 percent) and lowest in year 2015 (7.2 percent). The descriptive analysis shows that the average total loan and non-performing loan is Rs.24.94 billion and 2.53 percent respectively. Similarly, the descriptive result shows that the average remittance, total deposit, total size, return on assets, interest rate, GDP and inflation is Rs.378.54 billion, Rs.35.14 billion, Rs.44.39 billion, 1.81 percent, 9.76 percent, 4.26 percent and 9.26 percent respectively. The study shows that there is positive relationship of remittance, total deposit, total size, and return on assets withtotal loan. Similarly, Interest rate, GDP and Inflation have negative relationship with total loan. Likewise, the study shows thatthere is negative relationship of remittance and GDP withNPL. Similarly, total deposit and total size have positive relationship with NPL. However, the interest rate and ROA have positive relationship with NPL. Likewise, there is positive relationship between inflation and NPL. The regression analysis shows that remittance has significant positive impact on total loan. Similarly, total deposit, total size, ROA have significant positive impact on total loan. Likewise, interest rate and inflation have negative impact on total loan. However, remittance has significant negative impact on NPL. Similarly, interest rate has significant positive impact on NPL. Likewise, total size, ROA and GDPhave negative impact on NPL. Inflation has positive impact on NPL.

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