The meaning of remittance

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The meaning of remittance

Chapter 2

Project definition

2.1 Background of Study

A remittance is a transfer of funds by a foreign worker to his or her home account bank at their country. For example, if I need to send my money to my family at Indonesia, I may do so by arranging for a remittance with an authorized remittance agent.

Remittance business has illegal and legal way. The company that wants to open business in remittance must register under Central Bank of Malaysia (Bank Negara Malaysia). The company must apply for legality business. If the sender send their money to remittance channel that doesn't have legality to do that business, so they can get guarantee that their money will back to them if something problem happen. Most of money changer is illegal way to do remittance business, because actually money changer is only have license for the selling and buying with different currency of money.

Remittances are playing an increasingly large role in the economies of many countries, contributing to economic growth and to the livelihoods of needy people (though generally not the poorest of the poor). As remittance receivers often have a higher propensity to own a bank account, remittances promote access to financial services for the sender and recipient, an essential aspect of leveraging remittances to promote economic development.

2.2 Problem Statement

In Malaysia, there were so many remittance channels, such as Remittance outlet, Exchange House and Money changer. The samples of Remittance outlet are Merchantrade Remittance, Herald Remittance, TML Remittance, PPTKI Remittance and many others Remittance. For Exchange House, we usually find it in many cities; exchange house is such as Western Union, Moneygram, UAXchange and the others. The money changer is the illegal remittance channel, because actually they only have license for change money from one currency to another currency. Some of banks are remittance channel too, such as CIMB Bank, Maybank and Bank Islam.

Remittance channel is partner working for tranglo sdn bhd, because the remittance channels will connect to the end customer. Our end customer is Tenaga Kerja Indonesia (TKI) and some worker from the other country. In Malaysia, there was so many Remittance channel. If Tranglo sdn bhd choose all that remittance as tranglo parter working, it will be spend more cost for the company. So tranglo must choose the best remittance channel as their partner working.

Because of the end of our customer is TKI, so if tranglo want to choose remittance channel is base on TKI perspective. That's why we will do some study about perspective TKI to choose remittance channel to send their money to Indonesia.

2.3 Objective of Project

This research has two objective, first is general objective and the second one is specific objective. General objectives are broad and long-term. Specific objectives are short term and narrow in focus. The general objective is met through accomplishing each of the specific objectives. By doing this research, I hope I can reach all objective of this research.

2.3.1 General Objective

General objective for my study is to determine the best remittance channel as working partner of Tranglo Sdn Bhd.

2.3.2 Specific Objective

  1. To determine which factor that affect Tenaga Kerja Indonesia (TKI) to choose their remittance channel.
  2. To identify the remittance channel that usually used by TKI
  3. To reduced the cost for Tranglo sdn bhd.

2.4 Scope of Project

Base on the objective above, this study will implicate some Tenaga Kerja Indonesia (TKI) in around Kuala Lumpur and Selangor area, such as Chowkit, Kampung Baru, Puchong, Kajang, Bangi and the others. Because of the cost is limited, so I will distributed it randomly to some area and try to looking for around more than 100 Indonesian.

Not only implicate some TKI, this study will implicate Tranglo sdn bhd. I will try to looking for data from this company to compare with the data that collected using the questioner to be used as secondary data.

2.5 Significant of Project

The study will be beneficial to several parties includes:

  1. To Tranglo Sdn Bhd
  2. The company will know which one the best remittance channel, so the company can improve their relationship with that Remittance channel to better job and better agreement between them.

    By providing Tranglo sdn bhd information beyond systematic field methods can attracting clients from any market. Last but not least, company will gain their main objective of this study.

  3. To Remittance Channel
  4. This study will give advantage to remittance channel to improve their service to customers. Because in this study, I will analyze what factor that influenced the customer to choose their remittance channel. So the remittance can use it to improve their service to be better than now.

  5. To Tenaga Kerja Indonesia (TKI)
  6. Not only for Tranglo Sdn Bhd and the remittance channel, this study will give advantage to TKI. TKI will know which the best remittance channel to send their money to Indonesia. Although the data is from TKI too, but I will analyze it using AHP method to give the best answer for it.

  7. To Student
  8. This study shall also be beneficial to Universiti Utara Malaysia (UUM) students especially for the graduates to develop, enhance and educate the level of knowledge of the Remittance Channel and research at Malaysia.

  9. To Subject
  10. As a student of Bachelor of Decision Science (Hons), they need to fulfill the requirement in finishing and completing this study. This is a compulsory subject should be taken to complete the degree course.