Remittances — Jamaica's economic lynchpin

Remittances — Jamaica's economic lynchpin

Jamaica National Money Services sees significant uptick in transactions during COVID-19 period

Observer business writer

Sunday, January 17, 2021

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EVEN though the World Bank predicted global remittances would fall by 22 per cent, with the Latin America and Caribbean region expected to record a 19.3 per cent drop, Jamaica has defied this fate as remittance inflows grew by 25 per cent to US $1.53 billion ($221.1 billion) and net remittances went up by 30 per cent to US $1.41 billion from April to September 2020.

With the tourism industry taking a $76-billion hit during 2020 and economic growth contracting by double digits, there was an extremely high level of uncertainty as to how Jamaica would have navigated the COVID-19-induced shock which severely impacted the economy.

However, remittances from the Diaspora and across the world helped cushion some of the impact which would have been felt by the population.

General manager of JN Money Services Limited (JNMS), Horace Hines detailed his company's role, at a recent Jamaica Observer Business Forum, in the tireless work it took to get the major trade centres to designate remittances as an essential service. This included working with several international experts and lobbying to ensure that the service could still operate under the lockdown conditions.

“April and May would have been very tough for us on the onset of the pandemic. Interestingly, we would have been at the forefront of the fight to get remittances listed as an essential service in the UK and Cayman Islands.

“A week after the first case in the Cayman, they locked down the country and only designated certain industries as essential, with remittances not being one of them. We were closed for a period of six weeks in the Cayman and during that period, we would have fought long and hard to get accredited to operate again. The industry reopened at the end of May and we've seen good recovery in that market.”

Hines indicated that JNMS is ahead of the overall market growth of 30 per cent, which speaks to the customer relationships the company has built over the years. He further highlighted JNMS's commitment to its customers as the company remained open during difficult times in 2020. In spite of this, very few members of staff tested positive for the virus during the height of the pandemic and even several months later that siyuation remains much the same. JNMS operates in 14 countries and four continents while processing about 20 per cent of the remittances, which makes the firm the second-largest player in the remittances behind Western Union.

“There is a lot of travel that usually comes out of the major centres. When people come home, they usually spend money to look after their affairs. Since that movement has stopped, money had to come anyway as they had obligations here to deal with such as assisting students who are family members or friends with tablets and laptops to deal with the new reality of digital learning.

The diaspora is playing a stronger role in ensuring we survive here. We have seen it in the BOJ [Bank of Jamaica] numbers and in our stores as well,” Hines offered as the rationale for the increase in remittances to Jamaica, which saw its borders closed for three months.

Despite many people thinking of remittances as just money sent from family when needed as a result of dependency, Hines challenged this thought and pointed to how family members play different roles to support the stability of the unit.

“It stems from people having their obligations at home and taking it seriously. They know many would have lost jobs here [in Jamaica] while a lot of our customers overseas are involved in essential services, whether it is medicine or distribution. A lot of them are still working and even those who aren't earning as much [they] still send funds home, as they know that they have family here that they have to take care of (family members). It's a family obligation for the most part.”

Hines confirmed that more than 800,000 remittance transactions come to Jamaica on a monthly basis, which means that JNMS alone processes a significant portion of those incoming funds. JNMS has also seen triple-digit growth of its online platforms' use as more people shift to sending money through digital means. Excluding the United Kingdom which has endured more lockdown measures, Hines says that business in all of the primary markets such as Canada, the United States and the Caribbean, are performing well ahead of the general market's growth data.

“If there was no Diaspora now and with tourism going through what it is now, we wouldn't have an economy and the dollar would be through the roof.

“In that context, it therefore means that the Government needs to put in policies to stimulate the Diaspora to continue to support Jamaica,” said chief executive officer of the Jamaica National Group, Earl Jarrett who was highlighting the critical role the Diaspora plays in supporting the country.

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