70 percent of overseas remittance put into business

VietNamNet Bridge – Vietnam has been one of the 10 biggest overseas remittance receivers in the world, despite the economic difficulties in recent years.

overseas remittance, overseas vietnamese, overseas workers, money transfer

A report of the HCM City branch of the State Bank of Vietnam showed that by the end of the second quarter of 2013, about $1.9 billion worth of overseas remittance had been delivered to Vietnamese through the local banks, an increase of 3 percent in comparison with the same period of the last year.

The figure is expected to reach $4.5-4.8 billion, increasing by 10-15 percent over 2012.

Overseas remittance service firms all have confirmed big sums of money remitted to Vietnam by overseas Vietnamese.

“Overseas remittance” nowadays is not only understood as the money remitted to Vietnam by the Vietnamese settling down in foreign countries to their relatives in Vietnam to help improve the relatives’ lives. The money has also been remitted by the Vietnamese workers overseas, who are working under the fixed-term labor contracts with the foreign employers. About $10 billion was remitted to Vietnam in 2012, while the figure has been increasingly steadily year after year.

More money into the real estate sector

The State Bank has noted that the overseas remittance has changed its flow. Only 23 percent of the overseas remittance in 2012 has been put into real estate investments, much lower than the 52 percent in 2011.

However, economists have noted that the capital poured into the real estate sector was still big. Since the overseas remittance volume in 2012 was 15 percent higher than in 2011, the 23 percent means a big sum, about several billions dollars. The sum proves to make nothing if compared with the huge total capital demand in the market, but it can partially help the market survive the difficulties.

The director of an overseas remittance service company believes that the overseas remittance flow would return to the real estate market in 2013.

Experts believe that the real estate prices have reached their bottom, therefore, it’s now the right time to pour money into property projects.

“The prices could not be lower. Buy now or never,” he said.

He went on to say that the Vietnamese overseas workers always try to save money to be able to buy houses in Vietnam where they would live when returning. Therefore, their relatives in Vietnam would use the money they remit to buy land and houses at this moment, when the properties are cheap enough.

However, the director said the capital to be poured into the real estate market from overseas remittance would not see a sharp increase, and that the market revival cannot rely on the overseas remittance.

Overseas remittance goes to business projects

Statistics showed that 70 percent of the overseas remittance in 2012 went to production and business projects.  Overseas remittance was really the “lifebuoy” for businesses and investors, who could not borrow money from banks due to the strict requirements, or had to pay sky high interest rates for the loans.

Experts believe that the money would continue flowing to business. It would not go to bank deposits, because the current deposit interest rate at 7 percent per annum is no more attractive. Meanwhile, the gold prices have been fluctuating and the property market remains stagnant.

Phuoc Ha

overseas remittance, overseas vietnamese, overseas workers, money transfer