By Daniel Igra
Families from Nigeria and the Caribbean are suffering the effects of the credit crunch as cash-strapped relatives in Hackney are forced to wire less money home.
Money transfer shops in the borough have reported an average fall in business of 10 per cent, with some putting the figure as high as twice that, an investigation by the Hackney Post can reveal.
While the drop in remittances is hitting individual families reliant on regular packages from relatives living in east London, a leading development consultancy firm warned the fall could also have “very big” long-term effects on developing countries, particularly Africa.
The manager of DT & T Money Transfer, on Kingsland Road, said business had fallen by up to 20 per cent since January.
Ade Amina said: “There’s been a real drop in trade. It’s mainly people who normally send money to Nigeria and the US. “People will be struggling back in these countries without this money.”
Maxine Johnson, of Swift Cash, also on Kingsland Road, said her shop had also seen a marked fall in remittances to the Caribbean, its biggest market.
“At the moment transfers to a few Caribbean countries are definitely lower.
“I know people who were sending £200 a few months ago and have now been forced to send over £150 or less.
One customer who has been forced to cut back his money transfers was Mark Wilson, a technician from Homerton. Mr Wilson, who moved to the UK from Jamaica several years ago, wires a weekly remittance to his mother, who still lives on the Caribbean island.
He said: “I’m struggling to send £40 a week to my mum every week, whereas before it was £60. “The credit crunch has hit me really bad and now it’s affecting my mum.”
He added: “I’m looking for more work. But ultimately I hope to go back to Jamaica – but it’s not so easy.
One country likely to be particularly hit by the fall in remittances is Nigeria, where nearly £500m was wired from the UK in 2007.
Ade Adeshina, chief executive of the O-Bay Community Trust for Nigerians, said the economic slowdown was not only endangering people’s livelihoods but straining relations between relatives thousands of miles apart.
“I have given counselling to a few couples who are on the verge of divorce. It’s difficult for people out there to believe what is going on here. They can’t understand why their husbands or wives are not sending the same amount of money back.
“It has huge knock-on effects on a family if it is no longer receiving money. Nigeria has no social security system so people are reliant on this money being sent through.”
Chris Gerrard, remittances expert at Developing Markets Associates, said the fall would have a major impact on developing economies.
“Things will be clearer by the end of this year; the situation is now quite unclear. But I think the fall in percentage terms for a country like Nigeria will be 10 per cent, which is very high.”