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: between 2022 and 2030, an estimated US$5.4 trillion will be sent by migrant workers back to their communities of origin in developing countries. IFAD is advocating to leverage the impact of these flows towards rural transformation and sustainable development.

The solution 

In 2021, US$605 billion were sent to low- and middle-income countries. That’s a growth of more than 8 per cent compared to 2020. 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

A decade of progress for small-scale farmers in Cuba

Marking ten years in Cuba, IFAD’s Country Director met small-scale farmers and partners to discuss progress made and what is yet to be done.

Related news

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IFAD and EU provide support to Malian diaspora to boost investments in agricultural sector

October 2022 - NEWS
Malian diaspora is keen to invest in the development of small and medium sized businesses (SMEs), especially to develop the agriculture sector, if they can access the right training, information and financial products, according to a new report funded by the European Union, commissioned by IFAD and developed by Red Mangrove Development Advisors, and Adept, the Africa-Europe Diaspora Development Platform.

Mobile remittances to lead digital revolution in marginal rural areas in five African countries thanks to IFAD grant funded by the EU

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IFAD announced today its first grant to a digital payments company, MFS Africa, to promote the use of mobile remittances in marginal rural areas in five African countries: Ghana, Kenya, Senegal, The Gambia and Uganda.

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.

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Announcing the GFRID Summit 2023

June 2023 - EVENT
IFAD and the UN Office of the Special Adviser for Africa are hosting the Global Forum on Remittances, Investment and Development (GFRID) Summit 2023.  

Remittances and their role in building resilience to improve food security in Africa

November 2022 - EVENT
Remittances contribute hugely to the economic health and social development of developing countries – IFAD and IOM know this well. For this reason, the two agencies are teaming up at COP27 in Sharm El-Sheikh to highlight the importance of these payments.

International Day of Family Remittances – Observance events 2022

June 2022 - EVENT
The International Day of Family Remittances helps raise awareness of migrants’ crucial contribution to the development of their communities of origin.

Related publications

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RemitSCOPE: Kenya Country Diagnostic

November 2022
This diagnostic provides an assessment of Kenya’s remittance market, especially in light of the COVID-19 pandemic, using a market-oriented approach.

RemitSCOPE: Uganda Country Diagnostic

November 2022
This diagnostic provides an assessment of Uganda’s remittance market, with special reference to factors related to the COVID-19 pandemic, based on a market-oriented approach.

RemitSCOPE: The Gambia Country Diagnostic

September 2022
The Gambia country diagnostic has been prepared in accordance with the PRIME Africa goals, to provide more in-depth analysis and additional evidence for the areas of action identified in the country road map.

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