PRESS RELEASE
First Deputy Governor Minxhozi attends the activity: “International Day of Family Remittances”

On 16 June 2021, the National Agency of the Diaspora and the Bank of Albania jointly organised the activity “International Day of Family Remittances”, under the auspices of the Minister of State for Diaspora, Mr Pandeli Majko. The First Deputy Governor of the Bank of Albania, Ms Luljeta Minxhozi, addressed to the first panel of the activity on: “Remittances, their impact on the economic and social development of the country”.

In the beginning of her speech, the First Deputy Governor identified the difficulties and risks posed by the COVID-19 pandemic to the economy and the need of central banks to expand more the gamma of instruments, which will halt the economic fallout.

In this view, Ms Minxhozi emphasised that innovations and new technologies have enabled the development of instruments and effective means to operate under the restrictions imposed by the lockdown of the economic activity and distancing measures adopted to contain the pandemic.

In addition, Ms Minxhozi underlined that digitalisation of financial services, innovation of monetary systems, communication systems, remote working and public services supplying, have eased life and ensured the continuation of the activity during the pandemic as well.  These instruments will be further developed to provide more services, commodity and eased utilisation, particularly security in interacting.

The First Deputy Governor said that these developments will enable to work, exchange, interact and carry out all activities and provide all services remotely and in real time, at relatively lower costs from those of traditional ways.  All these developments are assessed to bolster the changes of remittance structure and their role in the Albanian economy.

Ms Minxhozi stated that remittances account for more than 10% of GDP of Albania. Hence, detailed analyses of their impact on economic life are crucial.  In her speech, she provided an analysis of remittances performance over 2020.  In more concrete terms, in the first half of 2020, when shock from the pandemic was stronger, remittances fell considerably. In the second half of 2020 they jumped rapidly, 9.2%, in annual terms. Also, this increase has continued in 2021 Q1 (the annual growth stood at 10.6%).  “This fact shows that migrants have increased the amounts of money sent back home to help their families which encounter economic difficulties due to the crisis caused by the pandemic”, - said Ms Minxhozi.

First Deputy Governor Minxhozi explained that based on the studies and surveys of the Bank of Albania, remittances sent to Albanian families are an important financial source, with a relatively considerable percentage in their monthly income. Nevertheless, the financial inclusion level of households receiving remittances is lower. The shift towards digital transformations and payment system may be one of the deepest and most positive effects for the economic benefit of remittances which will stay with us beyond the pandemic duration.

In this regard, She introduced the positive effects arising from the approval of the Law “On payments services” as a whole, and in the field of remittances as well.   In more concrete terms, the main targeted advantages relate to the expansion of the activities gamma of MTOs and the balancing of operational conditions of MTOs compared to banks.   It enables these institutions to enhance their efficiency, and provides the possibility to open accounts remotely and the development of electronic trade, which may become a new channel to send remittances to households.  

Last, the First Deputy Governor pointed out that the expansion of both physical and virtual presence of service providers through promoting the bank which operates with agents, and the digitalisation of services by breaking the geographical barriers, supported also by a prudential framework on consumer protection, will considerably affect the increase of services’ efficiency provided in the of remittance market.

Concluding, the First Deputy Governor highlighted that the current achievements in the framework of the strategic objectives related to the modernisation of retail payment market and the National Strategy of the Diaspora, are met with the approval of the Law and the other undertaken measures.