Remittances and migration

Remittances and migration

The challenge

For over a century, people have been moving from rural to urban areas, and across national borders in search of better opportunities. Of the 250 million international migrants, approximately 200 million leave home to work and send remittances home to their families.

Helping these families make the most of their own resources is vital to reach the Sustainable Development Goals (SDGs) by 2030. The international community may now recognize migrant workers and their families as agents of change and key partners in this effort.

The potential is clear: one billion senders and receivers and a projected US$ 8.5 trillion in international remittances will be sent to developing countries between 2015 and 2030. IFAD is advocating to leverage the impact of these flows towards rural transformation and sustainable development.

The solution 

In 2020, US$540 billion were sent to low- and middle-income countries, more than three times official development assistance (ODA). It is estimated that 75 per cent of remittance flows go towards immediate needs, but the other 25 per cent – over US$100 billion per year – is available for other purposes.

The amount that matters most is measured in the individual US$200 or US$300 sent home regularly. This amount represents 60 per cent of total household income and, if leveraged, it can most effectively improve the living standards of migrants and their communities back home.

With these apparently small funds, most remittance families commit to reaching ''their own SDGs'' – reduced poverty, better health and nutrition, education, improved housing and sanitation, entrepreneurship, financial inclusion and reduced inequality, and the ability to deal with the uncertainty in their lives by increasing their savings and building assets to ensure a more stable future. The 

SDGs provide a unique opportunity to create a convergence between the goals of remittance families, government development objectives, private sector strategies to tap underserved markets, and the traditional role of civil society to promote positive change. In particular:

  • Financial inclusion and literacy for remittance recipient families can increase opportunities for formal savings and investment. In turn, these mechanisms can build the human capital of remittance families and improve their living standards through better education, health and housing.
  • Migrant investments beyond remittances can change the development landscape of local communities, if given appropriate options.
  • Remittance markets improved through an adapted legal and regulatory framework, greater transparency and competition can lower cost and provide more resources to remittance families.

Since 2006, IFAD, through its US$43 million, multi-donor Financing Facility for Remittances (FFR), has worked to increase the impact of remittances for development by enhancing competition, reaching rural areas, empowering migrants and their families through financial education and inclusion, and encouraging migrants’ investment and entrepreneurship.

Spotlight

Spotlight

11 reasons why remittances are important

Every year, on 16 June, the International Day of Family Remittances (IDFR) is observed to raise further awareness on the abnegation and sacrifice of migrant workers, who support their families and communities of origin through the money they send back home, particularly in these times of crisis.

Tags: RURAL FINANCE

Related news

Related news

On International Day of Family Remittances, a reminder that 1 in 9 people globally are supported by funds sent home by migrant workers

June 2019 - NEWS
Remittances from international migrant workers to their families are expected to rise to over US$550 billion in 2019, up some $20 billion from $529 billion last year, Gilbert F. Houngbo, President of the International Fund for Agricultural Development (IFAD), stated today.

African post offices can be at the forefront of remittance and financial services in rural areas

June 2018 - NEWS
Postal services can play a pivotal role in delivering remittances, lowering the transfer costs and providing access to basic financial services in Africa, according to a report released today by the International Fund for Agricultural Development (IFAD) and the European Commission (EC) on the occasion of the International Day of Family Remittances to be observed tomorrow.

International Day of Family Remittances: Working to build prosperity at home

June 2018 - NEWS
Ahead of the International Day of Family Remittances to be observed on 16 June, Gilbert F. Houngbo, President of the International Fund for Agricultural Development (IFAD) called for continued efforts to help remittance-receiving families build a sustainable future for themselves and their communities.

Related events

Related events

The impact of remittances for recovery and resilience through digital and financial inclusion

November 2021 - EVENT
This virtual Global Forum on Remittances, Investment and Development (eGFRID) webinar, hosted by IFAD for Financial Inclusion Week, will present opportunities to promote greater digital and financial inclusion for migrants and their family members back home.

IFAD at Diaspora Innovation Days in Africa (DIDA) 2021

November 2021 - EVENT
This IFAD-moderated virtual event takes place within the framework of the Diaspora Innovation Days in Africa (DIDA) 2021, a virtual gathering hosted by ADYFE (African Diaspora Youth Forum Europe).

Global Forum on Remittances, Investment and Development – Summit 2021

June 2021 - EVENT
On 16 and 17 June, IFAD will host the Global Forum on Remittances, Investment and Development 2021, held virtually.

Related publications

Related publications

Managing agricultural risk through remittances: the case of Senegal

December 2020
This feasibility study explains the role of remittances in agricultural risk management.

How post offices can leverage the impact of remittances: A set of working papers

June 2020
This set of three working papers explores ways to maximize the impact of remittances delivered through post offices.

Research Series Issue 56: The impact of migrants’ remittances and investment on rural youth

December 2019
This study analyses how migrants positively contribute to the sustainable economic development of rural youth in their countries of origin.

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