This study investigates the institutional impediments of remittances with reference to the cost of transmission in Nigeria. The study is motivated by the increasing inflows of remittances through informal channels that would have been directed into the financial system to improve savings and enhance financial deepening if they were accounted for. The study therefore investigates whether the use of informal channels is caused by the increasing costs of collecting remittances that is partly induced by financial institutions. The study uses a bank exit survey data and a household survey data collected by the Center for Demographic and Allied Research (CDAR). T-test analysis and logit regressions were employed to achieve the objectives of the research. The findings show that there is no significant difference in the frequency of receipt for the formal and informal channels, transaction cost negatively and significantly determinants the use of formal channels flows, and finally there exist a significant difference between the transaction costs of using formal and informal channels of remittances. Financial institutions should therefore checkmate the charge of remittance receipt to encourage the use of formal channels and increase the frequency of flows
Keywords: Impediment, Institutional, Nigeria, Remittances, Transmission-Cost
