Банкеръ Weekly



Most Bulgarians who live abroad are perfectly aware of the technology. It is as follows: the person who orders the transfer informs his relative by phone or e-mail through which of the two - Moneygram or Western Union - he is sending the money. Besides, he dictates the number of the transfer as well as the code word that the payee needs to know in order to get the money. Having learned that, each payee may go to the branch of any bank that offers the services of Moneygram or Western Union. There he needs to fill in a form with his full name, address, number of transfer and code word. Then he will get his money. Those who haven't received money through this scheme so far should know that the bank does not collect fees from the payee. But the one who orders the transfer will be asked to pay fees ranging from 10% to 15% of the transferred amount.Paradoxically enough, Bulgarians who live and work abroad are becoming a significant factor for the country's balance of payment. According to the statistics of the Bulgarian National Bank (BNB), in 2004 they transferred nearly EUR800MN to their relatives at home - some EUR200MN above the amount transferred in 2003. Moreover, these figures do not include money and presents sent unofficially through friends, but only bank transfers. Experts from the analyst departments of commercial banks claim that the amount sent home by Bulgarians who live abroad exceeds EUR1BN, because those who hold seasonal jobs in other countries return home and bring the money earned in cash. And EUR1BN is an amount that seriously affects the balance of payment of a country as large as Bulgaria.In practice, the 2004 revenues resulting from transfers by Bulgarians represent the third biggest item of convertible currency revenues following foreign investments (EUR1.96BN) and revenues from leisure industry (EUR1.75BN). Therefore, politicians should not be calling the Bulgarians living abroad to come back but rather ask them to remember their relatives at home. These people have chosen to earn their living abroad as they are not able to do so in their motherland.Anyway, we cannot say that this kind of providing huge currency revenues is a Bulgarian know-how. BNB experts say that there are countries for which money sent by citizens who work abroad is vital for the balance of payment. For example, 75% of Cuba's all foreign currency receipts come from emigrants in the USA. More than a million Filipinoes work in various Asian countries, of which 4,000 in Iraq. Bulgarian central bank experts comment that the foreign currency revenues these people bring to their country are very important for its economy. That's why, when in July 2004 terrorists threatened they would attack its citizens across Asia, the government of the Philippines immediately agreed to withdraw its 40 military men from Iraq.What attracts the attention in Bulgaria, however, is the fact that the amount of transfers made by Bulgarians from abroad has been harshly growing since the Currency Act was enforced in the early 2000. The act introduced extremely liberal conditions for the import and export of currency. Statistical figures prove that. In 2000, transfers effected by Bulgarians who live abroad to their homeland amounted to EUR300MN. A year later, they reached EUR470MN. In 2002, the transfers already amounted to EUR530MN and in 2003 - to EUR620MN. For comparison, before the Currency Act was enforced these amounts did not go beyond EUR230MN per annum.Bulgarian workers in foreign countries use various ways to send money home. The most frequent among them is to put the money in an envelope and give it to a bearer who returns to Bulgaria. The second one is to transfer the money from a Bulgarian citizen's foreign bank account to the account of his relative in Bulgaria. This is also the cheapest way of transferring money. The person who receives it does not pay bank fees. They are payable by the person who orders the transfer and their amount depends on the tariff of his serving bank. If you choose to send money to Bulgaria through a bank, the amount should be higher than EUR500, because each bank abroad has a lowest transfer fee varying from EUR5 to EUR10 and that would be rather expensive for someone who decides to send smaller amounts to Bulgaria.In case you count on an urgent money transfer from abroad, you may use the services of Moneygram or Western Union. The two transnational companies carry out immediate money transfers in every point of the world where they have representative offices. All banks provide their services across Europe and the US. The same is also valid for Bulgaria. Moreover, some exchange bureaux carry out the immediate transfers of at least one of them, too. The advantage they provide is that the person who sends the money from abroad as well as the one who receives it needs no bank account on his behalf. What is more, the transfer is effected in up to ten minutes. You may also send money to your relatives in Bulgaria through postal order. The service is again expensive for the person who lives abroad and sends the money. And the one who waits for it can only have it in two or three days. Usually this service is used by the relatives of people who live in small towns and villages in Bulgaria where there are no bank branches.With the Money Transfers Act adopted by the Parliament on March 24, 2005, there will be more alternatives for sending money from abroad. The act allows companies which meet certain requirements to create money transfer networks. Private capital holders find this kind of business quite interesting. By the time the country joins the European Union (January 1, 2007), a network of cross-border transfer systems will have been built on its territory. These systems will be of great importance, because with the European labour market opened the flow of money transfers by Bulgarians working abroad will keep growing. At the same time, there will be an increasing number of foreigners who will live and work in Bulgaria. And they will need reliable payment systems through which they will carry out transactions with companies or relatives in their own country. Therefore, the transfer of money in the future will not be so dependent on technological abilities but rather on the information that customers have at their disposal.

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