In South Asia, Nepal ranks 4th in remittance inflows. In 2018, the Himalayan nation received $8,064 million, effectively booking a slot on the World Bank’s top 20 recipients of inflows. Most of the money came in from Qatar, Saudi Arabia, India, the United Arab Emirates, and the United States.
Within the past decade, Nepal's Department of Foreign Employment issued more than 3.5 million work permits to Nepalese going abroad. The money they send has supported their families, local businesses startups, and financed social projects.
Whether you are in the Gulf, India, Malaysia, the United States or any other part of diaspora you can send money to your family in Nepal. There are several providers and remittance channels available to help you do so.
That said, you need to compare the different ways of sending money, the information you need, the benefits of the various providers and the factors to consider when sending. This information will help you to make sound decisions when sending. Read along for detailed information on these aspects and so much more!
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There are multiple ways to easily send and receive money in Nepal but these will largely depend on the provider you decide to use. Below you will find everything you need to know about sending and receiving money.
Nepal is a relatively small economy with a sizable population, 29.3 million as of 2017. However, over 30 per cent of the economy is dependent on remittances. Places as remote as Cheskam in the northeast have recently been receiving more money from their loved ones in the diaspora.
There are several options to use when sending money home to your family, relatives and friends. The formal are banks and money transfer operators (MTOs).
Nepal has close to 250 financial institutions licenced by the Nepal Rastra Bank (the central bank of Nepal). However, not every financial institution has the capacity and mandate to provide wire transfer services, but most of them do, including the 28 Class A commercial banks.
About 60% of Nepalese are unbanked. This phenomenon makes wire transfers the least preferred way of sending money to the country. It takes about 3 to 5 days for a typical wire transfer from Qatar to get to a Nepalese in Kathmandu. The cost of sending is relatively higher compared to money transfer operators.
These inconveniences have made Nepalese abroad to seek for alternative ways of sending money to their loved ones back home.
Money transfer service providers are the dominant players in Nepal’s transfer corridors. There are some providers such as Arabian Exchange Company that predominantly operate on the Gulf remittance corridors. Others like Western Union, MoneyGram, Xoom, WorlRemit, Xpress Money, Ria, and Small World are allover the world.
Money transfer operators require that you signup for an account, pay for the transfer using a debit card, credit card, bank debit (ACH), bank transfer or cash deposit. Once your account is loaded, you can transfer to a bank account or cash pickup agent through the website, mobile app or at a store.
When sending money to Nepal using MTOs, you can choose any of the following methods depending on your preferences and interests.
Bank transfers – You can deposit money directly into the recipient's account in Nepal. Of course, this method serves the banked population. Most people in areas such as Province 2, the most multidimensionally poor province in Nepal, do not have access to banking facilities. For this reason, bank transfers whether from MTOs to banks or bank to bank, are not commonly used in Nepal.
Cash Pickup- This method of sending money to Nepal resonates well with Nepalese abroad. The advantage it has is that the recipients get their money in a ready-to-use form. For the unbanked populations, this is convenient. Providers such as Western Union, Ooredoo Mobile Money (OMM), Arabian Exchange Company, MoneyGram, Xoom, Ria and others have enjoyed high transfer volumes to Nepal in the past couple of years.
Mobile Wallet – If you are sending from Qatar to Nepal, you can use OMM mobile wallet service to deposit directly to the recipient’s mobile in Nepal. This method is convenient for small amounts. However, the maximum you can send per day is 10,000 Qatari riyals equivalent to $2,740.
Some Nepalese use Informal Value Transfer Systems such as Hundi to send money home. Such channels commonly used in the Korea-Nepal corridor, are illegal and not regulated by the formal banking system. Using them may expose you to unnecessary risks and fraud.
When sending money to Nepal, money transfer service providers will require that you provide some information. The information varies from one provider to another and the method of sending money you choose. That said, the following are some of the details that you’ll have to provide.
Depending on where you are sending from, you may have to provide additional information to satisfy the authorities.
The unemployment rate in Nepal is 40 per cent. About 1,600 Nepalese men and women leave the country daily for greener pastures, especially in the Gulf states. When they get employment in the destination countries, they immediately begin sending home some money to take care of their families, invest, repay debts, and contribute to social causes.
In the 2015/16 financial year, the average annual household consumption in Nepal stood at $2,850. About 53.8 per cent of the budget comprises food items. With 25.2 per cent of Nepalese living below the national poverty line, remittances for household subsistence are crucial. Nepal Living Standard Surveys revealed that remittance significantly reduced the headcount poverty rate from 42 per cent to 25 per cent between 1995 and 2011.
Most Nepalese travel abroad to get better opportunities to help their families back home. The migration process involves a lot of costs which families have to bear to ensure their loved ones resettle overseas. The first round of remittance is mostly used to clear off the debts incurred and other historical credit facilities.
Nepalese abroad are buying land at home and building houses for their families and for renting out. The real estate sector has been growing steadily and has attracted a lot of inflows from the diaspora. Sub-metropolitan cities such as Itahari have recorded rising property prices because of land and housing demand.
In a study examining the relationship between remittances and healthcare usage in Nepal, it was found that diaspora remittance increase access to health care. Nepal introduced a nationalised healthcare policy targeting specific districts through social healthcare programs. Remittance income increases the likelihood of Nepalese families visiting doctors and getting higher-priced medical care.
Nepalese abroad are investing in productive farming assets to help them create sustainable income for their families. Research done in Chitwan shows increasing participation in agricultural investments for households with migrants compared to those with no migrants.
Nepal has colourful, vibrant festivals most of them having religious connotations. Nepalese in the diaspora often send money to their family and friends to celebrate such festivals as Dashain and Tihar, Buddha Jayanti, Gai Jatra, and Janai Purnima. Some of the remittances go towards weddings and social activities.
Transferring money to Nepal is not an option for the millions of Nepalese in the diaspora. Many leave their families behind and regularly send money home to supplement the family income. Banks are a traditional source of sending money, but money transfer services are gradually seizing the opportunity. Some of the reasons for this change of preference include:
Apart from the provider benefits and unique features of the sending platforms, there are certain things you need to consider when sending to Nepal. These include:
Knowing the processes involved when sending money to Nepal is critical. The various providers, the services they offer, the information required to send and receive money and the things to consider when sending to Nepal are some of the grounds you need to cover.
The fastest way to send money is through the fast versions of either Western Union or Xoom. Both of these options will see to it that your money reached its Nepalese destination in a matter of minutes. Both Xoom and Western Union also have plenty of locations inside Nepal, and they are among the most secure options available to you.
The only downside to either of these fast options is that they are very expensive. You can expect to pay a hefty upfront fee, and the hidden currency conversion rates are significantly higher than average.
The cheapest way to transfer funds to Nepal is through TransferWise. TransferWise only charges an upfront fee, which is lower than much of the competition. The real savings come in the form of an absence of hidden currency conversion fees, which is TransferWise’s biggest selling point. TransferWise is also a fairly quick option, as it should only take a day or two to complete a transfer.
TransferWise ends up saving you the most money when you send funds to Nepal. It also performs very well in general, with the exception of speed.
The easiest way to send money is also through TransferWise. TransferWise uses a three-step process that can be learned and repeated easily. All you need to do is tap in how much money you need to send and the destination. After that, you just complete the payment to TransferWise and the rest is up to them.
At the time this was written, the exchange rate for the Nepalese Rupee (NPR) was 113.9800 NPR per American Dollar (USD). The NPR reached a high of 115.7350 NPR per USD in the last 90 days, while the low was 109.3202 NPR per USD. The average exchange rate for the last 90 days was 112.1377 NPR per USD.
Over the last 90 days, the NPR has demonstrated a 0.31% volatility. The NPR is a rather stable currency and has fluctuated relatively mildly in the last two years. You can reasonably expect only minor fluctuations going forward, barring any unforeseen circumstances.
TransferWise is the overall best way to transfer money. Their ease of use combined with their low rates makes them an easy choice. While you will need to wait a day or two for the money to arrive at the destination, it is still faster than many more expensive options. With TransferWise, you can also send large amounts of money without having to pay a higher fee. In the end, TransferWise is the best overall option for sending funds to Nepal.
Sending money anywhere else in the world is as easy as sending money to Nepal. If you're looking to send money to another country, here is the list of the most popular destinations.