Remittances in Jamaica

by Jul 5, 2017Financial Research


Jamaica’s Reliance on Remittance 2nd in the Caribbean

January 2019

Remittances to Jamaica are primarily used for household expenses by the poorest quintile of the Jamaican population[1]. The World Bank states that Jamaica received over US $2.4 billion in personal remittances in 2017, which represents an average of 3% growth over the past ten (10) years (removing any outliers). Figure 1 below shows the trend in Jamaica’s personal remittances in today’s US Dollars from 1990 – 2017.


Additionally, although the growth in personal remittances is small, it remains a significant contributing factor to Jamaica’s economy, as remittances represented 16.6% of Gross Domestic Product (GDP) in 2017, as seen in Figure 2.


 Figure 1: Value of Remittances to Jamaica in USD Millions
Source: [World Bank staff estimates based on IMF  balance of payments data and World Bank OECD GDP estimates]


Figure 2: Remittances to Jamaica as a % of GDP
Source: [World Bank staff estimates based on IMF balance of payments data and World Bank OECD GDP estimates]


Jamaica is ranked 16th out of 176 countries in terms of their reliance on remittances. Over the past 10 years, Jamaica’s remittance as a % of GDP averaged at 15.8. This places Jamaica 2nd in the Caribbean behind Haiti and 4th in the western hemisphere in regards to remittances as a percentage of GDP. To put it into perspective, tourism, one of the largest sectors in the Jamaican economy, directly contributed about 8% to GDP in 2017 (roughly half of what remittances contributed).


The latest data from the Bank of Jamaica (Aug 2018) indicates that a majority (63.7%) of the remittances to Jamaica are from the United States. Figure 3 depicts the proportion of remittances from the source countries as of Aug 2018.




Over the last five years, on average, the remittances from Cayman grew 5%, both the US and the UK grew by 4% and Canada grew by 3% each year.  Figure 3 below shows the proportion of remittances to Jamaica from the source countries over the last six years.



Figure 3: Share of Remittance Inflows from Source Countries Source: Bank of Jamaica


 Figure 4: Proportion of Remittances to Jamaica by country

Source:  Bilateral Remittance Estimates using Migrant Stocks, Host Country Incomes, and Origin Country Incomes (millions of US$) (2013, 2014, 2015, 2016, 2017 and 2018 Versions) 



Remittances in the Caribbean


As previously indicated, Jamaica is ranked 2nd in the Caribbean behind Haiti and 4th in Latin America and the Caribbean in remittances as a percentage of GDP. The World Bank states that remittance flows into Latin America and the Caribbean grew 8.7 percent in 2017, reaching another record high of nearly $80 billion. Also, remittance flows into the region grew by about 9.3 percent in 2018 to reach $87 billion, led by Mexico and Central American countries. This exceeded the World Bank’s forecasted growth and was almost as large as the export growth for the region in the same year.

The primary attributing factors for the increase include stronger growth in the United States economy/ labour markets and tighter enforcement of U.S. immigration rules which may have impacted remittances as migrants remitted savings in anticipation of shorter stays in the United States[2]. Latin America and the Caribbean is the region with the highest growth in remittances received globally. Pew Research also stated that “The increase in remittances to the region is primarily due to general improved labor market conditions in the U.S., which has helped boost Latin American migrants’ capacity to send money home.” They indicate that this improvement was especially evident in sectors such as information, construction and manufacturing, industries in which many Latin American immigrants work[3].


 Location of Licensed Remittance Companies in Jamaica

 The Bank of Jamaica lists the entities in the table below as licenced remittance companies in Jamaica. The table also indicates the number of agents by Parish as of November 2018[4]. Note that one agent location may provide remittances for more than one licensed remittance company. As such, there are 453 remittances agents in Jamaica providing services for seven (7) named remitters as seen in the table below.


 Table 1: Number of Agents in Jamaica by Parish and by Remittance Company

 The major players in the Jamaican market include GK Money Services, Lasco Financial, JN Money and VMBS Money Transfer, which are licensed representatives of either Western Union, MoneyGram or other global partners.


The Future of Remittances

Payments across the globe are expected to increase, primarily in developing countries, which see growth of up to 11% compared to the global average of 3-4%.

Continued migration is expected to be a major contributing factor to the increase remittances to the Latin America/ Caribbean region. It is anticipated that Jamaica will continue its trend of net outward migration, but at a decreased rate, as seen in the World Bank data in the table below. The rate of permanent emigration to the US is expected to decrease, emigration to Canada is expected to marginally increase among the highly skilled groups and the UK will remain negligible as a destination for Jamaicans; however, economic activity in the US is expected to increase and is anticipated to be weaker in Europe. An overview of Jamaica’s brain drain phenomenon according this IMF Working paper can be seen in the figure below.


 Figure 5: Brain Drain in Jamaica

 Source: IMF Working Paper: Migration and Remittances in Latin America and the Caribbean: Engines of Growth and Macroeconomic Stabilizers?

In Jamaica, remittances grew by 4% in 2017 and 3% each year on average over the past 10 years. As outward migration continues to increase, consequently, so will remittances.

Remittances are expected to grow globally by 4.1% in 2018, but the uncertainty in the outlook for the future includes the following:

  • Policy uncertainty and geopolitical risk
  • Increased restrictions on trade
  • Uncertainty surrounding lack of solutions to de-risking practices of correspondent banks
  • Vulnerability to the downside risk of anti-immigration sentiments
  • Restrictive migration policies
  • Considerations being made for taxing outbound remittances[4]


Alternative Remittance Models

Top Remittance companies are finding more way to diversify their incomes, with the challenges being faced by the traditional brick-and-mortar remittance business. Alternative remittance models in the global marketplace include the following:

  Mobile wallets

 Prepaid gift cards

 Cryptocurrency and blockchain transfer

 Social network remittances (P2P)

 These technology-driven solutions present a competitive threat to larger market players such as Western Union and MoneyGram, due to their convenience factor and lower transfer costs.


Digital Remittances

 Digital payments will be a significant driver in the growth of remittances. It is anticipated that the ratio of digital to non-digital remittances globally will be even by 2022. Digital remittances currently reflect about 30% of global remittances according to analysis done by Business Insider, as seen in the figure below.


 Figure 6: Forecast of Global Remittance Volumes

Source: Business Insider[5]

 The largest digital remitters still offer a combination of options with either cash pick-up, direct to bank transfers, mobile top-up or mobile transfers.


Blockchain Transfer

High-tech advances in blockchain transfer are modernizing the way remittances are transferred. Blockchain is a decentralized digital ledger that can store a continuous record of transactions. A decentralized system means that the database is spread out over multiple computer nodes, making the infrastructure difficult to hack. Despite this, stricter growing AML/CTF regulations and banks’ general unwillingness to work in “risky sectors”’ threaten the survival of this industry.


Mobile Money Remittances

Mobile money usage is rapidly gaining traction globally. In Jamaica, the number of mobile cellular subscriptions for 2017 stood at 107 per 100 individuals[6]. Mobile money eliminates the need for one to travel to a retail location and money is remitted almost instantaneously. A timeline of some key activities in the development of mobile money in Jamaica is as follows:

  • 2013 – Mobile Money approved in Jamaica
  • August 2013 – JCUES develops Conec, which was pulled from the market in Dec 2017 due to low usage.
  • August 2016 – NCB launches Quisk a mobile money account that facilitates the sending and receiving of money and pay via text messaging using no smartphone, internet access or downloading of applications[7].
  • February 2017 – GraceKennedy launches GK MPay[8]. Subscribers primarily use it for phone credit rather than consumer purchases or bill payments. The product can be used for remittances, bill payments, peer-to-peer transactions and payments at retail outlets.
  • May 2017 – WorldRemit and JMMB partner to launch online transfers
  • July 2018 – Sagicor launches Swype – Mobile point of sale devices for businesses on the go.

 One of the greatest concerns with mobile money is the security surrounding the technology and the seeming lack of trust in on the part of the consumer. Technologies like machine learning and remote digital identity verification offer potentially more efficient ways to both comply with various regulatory requirements that characterize the payments industry and deliver better service to customers.

As regulations evolve, technology becomes more adaptable and trust in other payment systems rises, remittance will morph into a cadre of primarily digital formats that incorporate lower cost, faster transfers and larger integration with payment systems and banks across the globe.


[1]Jamaica: Migration Profile 2017

 [2]World Bank –

 [3] Migrants from Latin America and the Caribbean sent a record amount of money to their home countries in 2016 –

 [4]Migration and Remittances – Migration and Development Brief 29 –

[5] International money transfers hit $613 billion this year — here’s what young, tech savvy users value most about them:
[6] “Mobile cellular subscriptions (per 100 people)”. The World Bank. 2017.
[7] “NCB launches into mobile money”

 [8] “GraceKennedy Gets Approval To Launch Mobile Money”