Cambodia Country Study Working Paper Series No. 44 ... - CDRI

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for starting the business was 100,000 baht. He charges 2.5 percent, and the broker in Svay
Sisophon takes 0.5 percent for the service. In addition, a broker in Thailand charges 50 baht from
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and 2000 baht for the Thai telephone service, which can increase to 3000 baht during Khmer
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In this village, there is only one shop running this business. He ordinarily transfers 20,000-
30,000 baht per month, but during national ceremonies this can rise to 200,000 baht. He can also
give money to people in advance in case of emergency and then contacts their relatives in Thailand
to get his money back. Each worker can send from 300 to 1000 baht. His capital of 100,000 baht
is not enough because sometimes the workers together transfer up to 200,000 baht per month.
As a result, he needs to borrow from a friend and pay interest of 3–4 percent per month. He has
not had any problems because the broker is in the same village as him. In Phnom Lieb
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month.
Source: interviews, September 2009
3.2.8. Use of Remittances
There is debate about whether remittances contribute to the development of
communities or make them dependent. There is an argument that relatives of migrants
spend remittances on consumption, not on things that would develop the household
capability and community. We therefore sought to learn how people use remittances.
We divided expenditures into two types: unproductive consumption and investment for
making further income. As illustrated in Table 3.16, households receiving remittances
spent 81 percent on consumption and 19 percent on productive expenditure over the
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general consumption is the largest single item, followed by debt repayment and medical
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of remittances reported spent in the previous year were on education and training.
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for production and agricultural machinery. Spending on these items was reported to have
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migrants are not used only for non-productive purposes but also for investment that
yields high returns. In some of the studied villages, FGDs report many new houses built
by remittances. Young migrants tend to use remittances for buying mobile phones and
motorbikes. It is hoped that when necessities are met, more remittances will be spent on
productive purposes.
37 CDRI