Examining the Determinants of the Choice of Remittance Channels by Ghanaian Migrants

Abstract

Sending money to loved ones can be a balancing act for migrants who need to find the right remittance channel that meets the need of both the sender and the recipient. Advances in finance and technology have provided migrants a wide range of options, although access to these options are dependent on various factors such as host country regulatory framework and legal status of the migrant. This study assessed the formal and informal remittance channels patronised by migrants and examined the underlying factors that influence migrants’ choice of a remittance channel, with particular focus on the social considerations which affect the economic action of migrants. The study employed a qualitative research approach, using in depth interviews to explore and understand the main elements that went into the decision of a select group of Ghanaian migrants to utilise one remittance service provider over another. The study found that regular migrants mostly utilised formal channels while irregular migrants were constrained to using informal channels. The study concludes that migrants preferred remittance channels which enable them meet their social obligations in a meaningful and timely manner. Consequently, a key recommendation of the study is that Governments need to work collaboratively with the private sector to expand the legal pathways for remittance transfers, in view of economic and development implications of remittances.