17 Sep 2024
Would you believe that money transfer from Germany to Gambia is nearly 20% of the GDP of Gambia and help so many families survive each day? To the overseas Gambians, especially those in Germany, remitting such amounts of money is not just a business of transacting but a way of making contributions to help the families, for education needs, or to enable family members to access healthcare.
However, maintaining this lifeline becomes quite challenging, especially with recent changes in Germany’s financial regulations. What is Germany up to in shrinking the amount of money Gambians receive from them, and what should you and your family do about it? Now, let’s look at the following factors for these strict policies and see how beneficiaries of these crucial funds—Gambian households—will be affected.
Like all the developed countries of the world, Germany has also become strict in its monitoring of financial transactions to prevent money laundering, financing of terrorism, and other related financial crimes. These concerns have been further amplified because of the geopolitical complexities of the area and the enhancement of the use of informal ITs that can help avoid the formal financial sector. As a member of the international community, Germany has been implementing stringent measures regarding AML and CTF policies, and as a result, Germany has put stricter remittance policies in place. As mentioned, these measures are focused on the improvement of transparency and security at the cost of increasing the number of regulations for making an online money transfer from Germany to Gambia.
These policies could, therefore, have profound implications for a country like Gambia, where, for instance, remittances alone constitute nearly 20% of the GDP. Food, educational, and healthcare costs are some of the basic expenses that are met out of earnings in the form of remittance. If the flow of such funds is disrupted or reduced drastically, the economic status of the nation is affected, and families that rely on such revenue sources are in the direct line of fire. The World Bank notes that any rise in the price of remittances or any form of delay in the process may cut down the actual amount being received by families and may exert an additional burden on the already stressed economy.
Some of the most significant changes that have been made in remittance regulations recently include the following;
One of the emerging trends in the remittance market is rising concern over transfer options. Money Transfer Operators (MTOs) and banks are now obliged to apply higher standards of due diligence in terms of identification of a sender and a recipient. In any case, the requirements may call for more documentation, stiffer safeguards of the customer’s identity, and a longer time to complete these tasks. Germany has also increased other reporting obligations, demanding financial organizations to identify and report any suspicious transactions more stringently.
Generally, these changes in the regulations are some of the major challenges that MTOs experience to send money to Gambia from Germany operations between both countries. As the analyzed operators are to strengthen the measures and dedicate human resources for the management of compliance, the costs of the latter are set to increase. Perhaps some smaller MTOs might be unprofitable in continuing to carry on their operations, which would further mitigate competition and may even increase the price for consumers. This impact is already being realized, especially by Gambian expatriates, by experiencing more costly and lengthy methods of remitting money back to their country.
If you are a Gambian and you are residing in Germany, then you might perceive that your usually used money remittances will undergo more scrutiny and time consumption. You will also see that the fees could be higher this time around because MTOs are dealing with escalating compliance expenses. This is important in order not to encounter some barriers or inconveniences when planning the transfers of the investments.
These stricter policies, in the long run, as already explained, could lead to high-cost remittances and an even longer time to conduct the remittance. Consequently, the changes could lead to many people in the Gambia employing other forms of transfers that are possibly insecure and are not regulated through the policies of well-established financial institutions. The decrease in the remittance means that the growth of Gambia may be hampered, and the development of education, health, and infrastructure may also be affected.
Hence, one or several policy alternatives could be available to Germany and Gambia to strike a balance between sending money online to Gambia from Germany and fostering economic development at the same time. Such measures entail establishing bilateral relations that would offer better structures on more viable means of facilitating safe remittance. The other strategy could entail persuading MTOs to leverage new technologies, such as blockchain, which provide higher security at lower prices. Moreover, many other remittance policies affect Gambians; for instance, strict regulations on legal and safe transfer channels can be reduced if Gambian expatriates are informed about available educational programs and information on how to make their legal transfers to their homeland.
Adapting to the evolving structure of the rules can be rather problematic however, there are measures to reduce it. Selecting a trustworthy and open money transfer service means that you deal with a legal and safe platform, for instance, ACE Money Transfer. Monitor new policies on remittances and try to plan your transfers based on these policies since it may result in delays in transfers or even high charges.
Policies regulating the flow of remittances from Germany to Gambia have been tightened up over the years. It is apparent that this is indicative of a global trend to the strengthening of measures regulating the flow to send money online to Gambia from Germany across borders. As these measures are designed to prevent various forms of financial crimes, they also present major difficulties to Gambian families as well as MTOs.
So, do not be caught unawareness by such stringent measures on remittance. Follow the ACE Money Transfer News and Updates to get informed about the new policies regarding money transfers, pocket tips, and limited-time deals. Be wise and guarantee that your family members and friends get the care they require!
Germany proceeded to implement further measures to counter money laundering, financing of terrorism, and other kinds of financial crimes.
The restrictions may result in higher expenses, longer time required to send and receive money, and decreased availability of remittance services affecting families that depend on these funds.
There are four principal modifications made within the framework of the current reform; these are higher standards of verification, augmented reporting obligations, and strengthened concentrates on the money transfer techniques.
Gambians living abroad should ensure that they use legal entities that transfer money away from their country, ensure they stay updated with the state changes, and ensure that they plan for the transfers earlier to avoid being charged more.
These policies may lead to a rise in the costs of sending money and a decrease in the overall amount of money being sent to Gambia, thus negatively affecting its economic development.
