The Germany-Serbia remittance corridor: challenge of establishing a formal money transfer system Luna Martinez, Jose de

This study provides an overview of remittance flows from Germany to Serbia. The report argues that there are various factors that discourage migrants from using financial institutions to send money home, including 1) limited (but growing) trust of Serbs in their banking institutions, 2) high fees for using remittance products offered by financial institutions, 3) low competition in the remittance marketplace, and 4) limited (but growing) level of bank penetration in Serbia. This study also argues that there is also a need to increase the supply of financial products available to Serbs that send or receive remittances on a regular basis. The report concludes with a set of specific recommendations on needed policy changes to facilitate the transfer of remittance flows from the informal channels to licensed or registered financial institutions, thereby maximizing the developmental impact of remittances, reducing remittances fees, improving data collection practices! , strengthening the regulation and supervision of the money transfer industry, and preventing money laundering.