Remittances and development
Over the past two decades, remittances have emerged as an important contribution to the well-being of migrant families and the development of communities of origin. In 2019, over 200 million migrant workers sent to their 800 million family members in developing countries US$554 billion, a figure representing more than three times the annual flow of official development assistance (ODA) and exceeding foreign direct investment (FDI).
Remittances are a private source of capital which should not to be equated with other international financial flows. However, they can help lift millions of migrant families out of poverty, touching the lives of up to one billion people, either as senders or recipients. They allow migrants and their family members to improve their access to health, education and housing, thereby helping achieve their own Sustainable Development Goals (SDGs).
Maximizing the impact of remittances on development
Since 2006, IFAD's multi-donor Financing Facility for Remittances (FFR) aims to maximize the impact of remittances on development, and to promote migrants' engagement in their countries of origin.
Through the financing of almost 70 projects in over 40 countries, the FFR is successfully increasing the impact of remittances on development by promoting innovative investments and transfer modalities; supporting financially inclusive mechanisms; enhancing competition; empowering migrants and their families through financial education and inclusion; and encouraging migrant investment and entrepreneurship.
The FFR is also an important source of knowledge on remittances: global estimates of remittances in developing countries were published for the first time in its Sending Money Home reports.
It contributes to policy dialogue through actionable research and the Global Forum on Remittances, Investment and Development (GFRID), bringing together stakeholders from around the world involved in the field of remittances, migration and development, and stimulating the creation of partnerships and long-lasting synergies among public and private sectors, and the civil society. Past forums were held in Kuala Lumpur (Asia-Pacific, 2018), United Nations Headquarters in New York (global, 2017), Milan (Europe, 2015), Bangkok (Asia, 2013), Tunis (Africa, 2009) and Washington (global, 2007). The next forum will be held virtually in June 2021.
The FFR also coordinated the effort towards formal adoption of the International Day of Family Remittances (16 June) by the United Nations General Assembly. The day aims to raise awareness of the fundamental contribution of migrant workers not only to their families and communities back home, but also to wider sustainable development in their countries of origin. In 2020, IFAD launched the IDFR campaign - Building resilience in times of crisis, to engage public and private sector entities in supporting one billion people - migrants and their families - build resilience in times of crisis, by taking action towards reduction of transfer costs and provision of financial services.
Since 2019, the FFR has been implementing the Platform for Remittances, Investments and Migrants' Entrepreneurship in Africa (PRIME Africa) programme, aimed at maximizing the impact of remittances for millions of families in Africa, contributing to foster local economic opportunities in the migrants' countries of origin.
The FFR is cofinanced by IFAD, the European Union, the Grand-Duchy of Luxembourg, the Ministry of Foreign Affairs of Spain and the Swedish International Development Cooperation Agency (Sida).
We provide regular updates on the challenges facing remittance families. For more information, please contact us at email@example.com.
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