Belgium Faces High Remittance Costs Despite Significant Outflows

Brussels (Brussels Morning) – The IOM reports high remittance transaction costs in Belgium, with 2023 seeing over USD 7 billion sent abroad. Lowering fees could boost remittances, aiding global development and humanitarian efforts.

The International Organization for Migration (IOM) has issued two new reports on Belgium’s remittance landscape and the effect of high transaction costs on remittance flows and development effects for 21 countries. 

How High Are Transaction Costs for Belgium’s Remittances?

In Belgium, where one-third of the people have a migrant background, over USD 7 billion (EUR 6.5 billion) in remittances were transmitted in 2023, but the prices of sending are high. The findings were shown at IOM’s first-ever National Remittance Summit in Brussels, ahead of the International Day of Family Remittances.  

“Migrants often struggle with high transaction costs when they want to help their families or communities by sending a share of their earnings to their countries of origin,” stated Marise Habib, Chief of Mission, IOM Belgium and Luxembourg.   

“IOM research shows that the average transaction cost from Belgium to 21 countries is currently at 4.3 per cent, which is very high considering the Sustainable Development Goal to reduce the transaction costs of migrant remittances to less than 3 per cent. Our data allows for a greater understanding of the complexities that contribute to higher costs and how to address them,” stated Habib.  

How Can Lowering Transaction Fees Benefit Development Efforts?

The reports reveal that a 1 per cent reduction in transaction expenses could lead to an increase 

in remittances of up to 1.078 per cent, highlighting the potential of cost reduction measures. Lowering remittance costs to countries experiencing a humanitarian crisis, for example, would encourage migrants and diaspora to send more funds to communities that require it the most.   

The studies also indicate that cash remittances are, on average, 51 per cent more costly than digital remittances, while in-person money transfer operators are 83 per cent more pricey than online operators. These findings emphasise the importance of digital and financial inclusion of migrants and the requirement for more transparency on remittance costs.  

How Is IOM Addressing Remittance Challenges in Belgium?

The IOM Office for Belgium and Luxembourg, with approval from the Government of Belgium, operates the “O-REMIT” project, which collects insights into the costs, volume and effect of remittance flows from Belgium, obstacles to cost-effective remittance transfers, motivations and manners of people sending remittances, and the challenges of collecting remittance data.  

By operating jointly with remittance senders and concentrating on selected remittance corridors, IOM is also supporting to strengthening of informed decision-making on remittance services and methods.    

“The aim is to construct an environment which enables migrant and diaspora communities to fully realize their role as agents of change and development,” stated Habib.  

IOM’s work under O-REMIT is founded on data from the National Bank of Belgium, the Belgian Statistical Office (Statbel), KNOMAD/World Bank, and a thorough survey involving over 1,400 immigrants and members of the diaspora in Belgium.  “Although the O-REMIT studies focus on Belgium, the data offers insights into the way forward to achieving the Sustainable Development Goals, which would have a very positive impact on receiving communities worldwide,” stated Ariana Naser, co-manager of the O-REMIT project.