According to the World Bank (2014), “there should be a strong relationship between remittance flows and financial inclusion. A key reason is that remittances are usually regular and predict able flows, which should, in principle, make remittance recipients relatively more inclined to join the formal financial sector”.
It has been claimed also that remittances represent the most important financial transactions for people with limited access to banking services. These claims are based on two stylized facts observed in many developing countries, namely relatively low access to banking services, and relatively high levels of remittance flows.
In 2014, more than 2.5 billion people lacked a bank account, with the banking service penetration rates observed in developing countries. This number decreased by 20% between 2011 and 2014 (Demirguc-Kunt, Klapper, Singer, Van Oudheusden, 2014), despite multiple costs incurred by opening and holding a bank account: transport costs (e.g...