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

Related news

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

September 2022 - NEWS
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.

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.

Related events

Related events

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.

Enhancing the contribution of migrants in the post COVID-19 era

May 2022 - EVENT
This International Migration Review Forum (IMRF) side event—hosted by IFAD, UN DESA, and the World Bank—focuses on migrants’ contribution to sustainable development. It will provide concrete suggestions on how to promote objectives 19 and 20 of the Global Compact for Migration.

eGFRID - Remittances and investment: how migrants finance sustainable development

January 2022 - EVENT
The next eGFRID webinar, jointly hosted by IFAD and the European Commission (EC), will focus on the topic of “Remittances and investment: How migrants finance sustainable development.”

Related publications

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RemitSCOPE: South Africa Country Diagnostic

September 2022
The South Africa 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.

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.

RemitSCOPE: Ghana Country Diagnostic

September 2022
This Ghana country diagnostic was prepared in accordance with the PRIME Africa goals.

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