First Deputy Governor Gjoni: Address at the launching of Project GreenBack 2.0 for Albania as remittance receiver

Your Excellency Ambassador Graf,

Dear Mmes Jaeger, Pereira and Dashi,

Dear representatives of banks, payment services institutions, local government and civil society,

It is a great pleasure for me to open this event on the launching of Project GreenBack 2.0.

This project is another step in the framework of the very fruitful cooperation between the Bank of Albania and the World Bank in the field of payments, with funds from the Swiss government.

Project GreenBack is a World Bank initiative supporting remittances and aims at increasing the efficiency in the market for remittances, mainly through awareness raising and financial education activities. So far, this project has been implemented in a number of remittance sending countries, and now it is also implemented in a remittance receiving country, such as Albania.

I would like to emphasize that remittances and their significance for the Albanian economy have always been at the focus of the Bank of Albania. These flows have had a direct impact on the economy, both from the macroeconomic and the households and their welfare perspective.

More specifically, in Albania around 1/3 of households (around 32%) are receiving remittances, which have a direct impact on their welfare, financing consumption (mainly for necessity goods), education and healthcare, as well as investments to a certain extent. Remittances have contributed significantly to reducing poverty and increasing the welfare of these households. Globally, it is estimated that an increase in remittances by 10% contributes to poverty alleviation by 3.5%.

Berat, a city with high inflows of remittances from emigrants, has been selected as a Champion City of the Project GreenBack, within the framework of supporting remittances and their use by households. Following the successful implementation of this pilot project, this experience may be applied in other cities or regions across the country.

Project GreenBack, as will be explained by the World Bank colleagues, addresses remittances through a complex approach, in terms of payments, technical infrastructure, financial inclusion, market infrastructure, consumer protection, poverty reduction - in other words, in the social, economic, and technology frameworks. For this reason, it is worth mentioning that the efficient implementation of this project requires a close engagement and cooperation between the various stakeholders. Hence, I would like to thank a number of institutions for their readiness to engage, both at the regional and central level, and to encourage the continuation of cooperation, until the end of the project.

Banks and other institutions operating in the field of payments have a key role to play, and I invite them to be active and creative regarding the services offered in the market. International experience shows that remittances can serve as an important tool for expanding financial inclusion, and foster intermediation, thus creating new potential for your activity.

I would point out here the importance of remittance costs as well. The impact of these costs has been evidenced by a number of international organizations, which are taking concrete steps to reduce them. More specifically, in 2009, the G8 and later the G20, aiming at promoting remittances, set the target of reducing global remittance costs at 5%, while in 2016, the United Nations, within the framework of sustainable development, have undertaken a highly ambitious objective, which aims at reducing these costs to 3% by 2030, and eliminating remittance corridors costing more than 5%. Reducing the cost of remittances should be a priority for us, as well. The analysis of the available data show that remittance costs in Albania are above 8%, reaching even 14% for certain corridors, much higher compared to both the above-mentioned objectives, and the regional average.

Meanwhile, the Bank of Albania will pay particular attention to regulatory and legal improvements to be identified during the implementation of this project as well as a catalyst, supporting financial education and promoting various projects that may contribute to achieving these goals.

I would like now to conclude by reiterating the Bank of Albania's gratitude to the World Bank for the most fruitful cooperation in the field of payments, among others, a series of analyses and reports in the context of financial inclusion, which were materialized in: drafting a national project-strategy for small value systems; the study of the cost of payment instruments in Albania; drafting of the Law "On payment services"; the assessment of the systems operated by the Bank of Albania; and, recently, analysing and addressing the gaps and assessing the needs of the remittance market at the national level.

The materialization of these projects, including the GreenBack pilot project to be implemented in the champion city of Berat has been made possible thanks to the financial support with funds by the Swiss government, under the SECO. I avail myself of the opportunity to express our highest appreciation for this assistance and a special thanks to H. E. the Ambassador of Switzerland, Mr Graf, who, with his incredibly active presence and continued support, following closely the progress of the projects, has personally contributed to their progress.