East meets Western Union

In 2006, migrants across the world transferred $300 billion (Rs 12 lakh crore) to their homelands. India was the largest recipient of remittances, accounting for $27 billion (Rs 1.08 lakh crore)— making it the largest market for remittances in the world. China, Mexico and the Philippines closely followed India.

“It is estimated that, in 2007, $30-35 billion (Rs 1.2-1.4 lakh crore) will be remitted into India. India, clearly, is a huge market for us,” says Anil Kapur, Managing Director for South Asia, Western Union, which has a 17 per cent market share worldwide. According to Kapur, nearly 44 per cent of India’s remittances come from the US, another 32 per cent from the Gulf and Near Eastern markets.

Western Union has been rapidly expanding its footprint in India. “From less than 3,000 locations in 2001, we have over 50,000 locations now,” says Kapur. These include bank branches, post offices, retail outlets, petrol pumps. More than 60 per cent of its outlets are either in bank branches or post offices.

States like Punjab, Tamil Nadu, Andhra Pradesh, West Bengal, Uttar Pradesh and Bihar are major recipients of remittances. “The good thing about the remittance model we follow is that people have now found a legal, costeffective model of transferring money. Earlier, most of it would happen through illegal channels like hawala,” says Kapur, who also asserts that the company’s pricing in India is pretty competitive. “Our model allows a legal way of money transfer for people without bank accounts. A lot of Indians in the Gulf work as taxi drivers and labourers,” he says.

— T.V. Mahalingam