June 16th marked the International Day of Family Remittances, a significant occasion for millions worldwide. To honor this day, the World Bank, in collaboration with the Bank of Albania, organized the MONEY smART Exhibition. This event aimed to highlight the crucial role remittances play in Albania's economy—as a lifeline for families, a macroeconomic stabilizer, and a gateway to financial inclusion. The exhibition was part of the Remittances and Payments Program (RPP), which is implemented across the Western Balkans with financial support from the Swiss Secretariat of Economic Affairs.
The exhibition sought to enhance financial literacy amid an evolving financial landscape. The opening ceremony featured various interactive and educational activities for children aged 5-16, including art workshops using shredded banknotes, quizzes with prizes, and social media engagement opportunities. This exhibition marks the beginning of a broader financial literacy campaign that will tour Albania to maximize its impact.
According to research by the Bank of Albania, remittances are pivotal in Albania's economy; 23% of families depend on them, contributing about 18% of their total income with an average annual inflow of 2,000 euros per family. Remittances have contributed to an 8-percentage point decrease in poverty for families that solely rely on them.
Despite their importance, Albania's remittance market faces high costs and inefficiencies. The World Bank’s Remittance Prices Worldwide database indicates that sending $200 to Albania cost an average of 8.7% in Q4 2023—nearly three times higher than the Sustainable Development Goal (SDG) target of 3%. Additionally, it is estimated that 37% of remittances are carried in cash, bypassing formal channels.
These inefficiencies reflect current levels of financial inclusion in Albania; only 44.17% of adults held transaction accounts in 2021 according to the World Bank’s Global Findex report—below the regional average for the Western Balkans. Although there has been increased usage of digital payments and improved gender parity in account ownership, around two-thirds of Albanian adults do not use digital payments at all.
Low levels of financial literacy pose further barriers for senders and receivers alike. Assessments by the Bank of Albania reveal that approximately half of Albanians are financially literate compared to a global average of 63%. This shortfall is evident in low levels of financial inclusion and knowledge about financial products. Financial well-being in Albania is rated at a low score—7.7 out-of-22—with women, youth, elderly individuals, less educated people, unemployed persons, and low-income groups being most affected by financial insecurity.
The World Bank is working with the Bank of Albania to improve international remittance markets and leverage their development impact further. Policies focus on enhancing regulatory environments and financial infrastructure while addressing access challenges through technical assistance and foundational strategies like National Retail Payments Strategy and Financial Education Strategy.
Recognizing digital payments' potential to foster broader adoption and more efficient remittance channels, efforts will promote reforms targeting women, youth, and small merchants. The World Bank's involvement in establishing a Financial Education Working Group underscores its commitment to managing these educational efforts according to best practices and international standards.
Supporting Albania’s journey towards greater financial literacy and inclusion remains a priority under RPP initiatives aimed at ensuring tangible benefits for all Albanians.
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