Here, the government has to incite the establishment of other companies as well as apply the reduced taxes. Another way of amplifying competition in the sector is by pressing on price transparency. Remittances, as mentioned earlier, are also affected by economic and financial situation in beneficiary country. International experience brings many examples to illustrate this point. After a constant growth of remittances in Philippines, as a result of improvements in the investments environment in the early 90s, they became very shaky as the financial crisis affected the Asian countries at the end of the 90s. Likewise, Turkey after experiencing a stable growth of remittances during the 90s, saw a drastic fall as the financial crisis broke out in 1999-2000. However, an interesting observation in these cases is that, the fall of remittances and their volatility were lower than those of private capital flows. Remittances seem to react less to economic ups and downs compared to other capital flows displaying considerable stability over time (Ratha, 2003). In this context, countries with high remittance percentage relative to other capital flows could be more immune to capital drain during crises. Remittances are not simply expression of emigrants’ fondness to assist their families in adverse situations. They also represent an important financial source that augments capital inflows and investments in economy. Remittances may have a positive impact not only on the volume but also on the quality of investments.
In the case of Albania, as in many other developing countries, remittances enter the country by either formal or informal means. The most recent surveys show that only 22.6 percent of emigrants prefer to use official means, whereas 77.4 percent turn to unofficial channels – in most cases by themselves. The official network includes the commercial banks and money transfer companies, the activity of which is regulated and supervised by BoA. Money transfer companies (Western Union and Money Gram) have played a significant role in transferring remittances from the beginning of their activity in the 90s. Their wide geographical extension throughout the country covering also many rural areas has complemented adequately the rather slow expansion of the banking sector in facilitating money transfers. Lately, the official network has gained considerable grounds over the informal ways in terms of total transfers carried out. The volume of remittances channelled via official means in 2004 is estimated to have been around 46 percent of the total, as opposed to just 12 percent - the average for the period 1994-1996. It seems the official network has earned Albanian emigrants’ trust for transferring their money. The development of the financial system in Albania it’s a key factor in explaining the movement of transfers toward official means. Thus, only during 2004, there have been 30 new branches and banking agencies opened throughout the country. Nevertheless, the unofficial flows remain still high, accounting for more than half of the total volume.