Tag Archives: Remittances

Cutting the cost of sending money home: Fast payment systems, digital access, and the future of remittances

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Every month, millions of migrant workers send a portion of their earnings home to support their families — often providing the most reliable source of income those families have. These transfers are among the most personal financial acts in the global economy — a parent paying school fees, a family repairing a roof, a household keeping the lights on. But remittances can also do more than help families get by.

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Remittances are a critical economic stabilize

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This piece originally appeared in Barron’s on December, 2  2022 remittances1440x600shutterstock_2083444420.jpg

At a time when the world faces an extremely challenging outlook, remittances are a vital lifeline for households in developing countries, especially the poorest.  Remittances are primarily money that migrants send home to support their family. They alleviate poverty, improve nutritional outcomes, and are associated with increased birth weight and higher enrollment rates for children in disadvantaged households. Studies show that remittances help recipient households build resilience, for example, through financing better housing and recovering from losses in the aftermath of disasters. 

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Remittances Grow 5% in 2022, Despite Global Headwinds

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WASHINGTON, Nov 30, 2022 — Remittances to low- and middle-income countries (LMICs) withstood global headwinds in 2022, growing an estimated 5% to $626 billion. This is sharply lower than the 10.2% increase in 2021, according to the latest World Bank Migration and Development Brief.

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Remittance Flows Register Robust 7.3 Percent Growth in 2021

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WASHINGTON, Nov 17, 2021 — Remittances to low- and middle-income countries are projected to have grown a strong 7.3 percent to reach $589 billion in 2021. This return to growth is more robust than earlier estimates and follows the resilience of flows in 2020 when remittances declined by only 1.7 percent despite a severe global recession due to COVID-19, according to estimates from the World Bank’s Migration and Development Brief released today.

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Six reasons why remittances soared in South Asia during COVID-19

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Remittance flows are a major source of income for all countries in South Asia, larger than all other capital inflows combined.  In 2019, India received more remittances than any other country in dollar terms, and Nepal ranked third in the world in terms of remittances to GDP at 27 percent.  Remittances seem to have been even more essential during the COVID-19 pandemic, increasing by 5.2 percent in 2020 in South Asia. But this was somewhat surprising because household surveys globally showed remittances falling, especially in the second quarter of 2020.

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World Bank Predicts Sharpest Decline of Remittances in Recent History

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WASHINGTON, April 22, 2020 — Global remittances are projected to decline sharply by about 20 percent in 2020 due to the economic crisis induced by the COVID-19 pandemic and shutdown. The projected fall, which would be the sharpest decline in recent history, is largely due to a fall in the wages and employment of migrant workers, who tend to be more vulnerable to loss of employment and wages during an economic crisis in a host country. Remittances to low and middle-income countries (LMICs) are projected to fall by 19.7 percent to $445 billion, representing a loss of a crucial financing lifeline for many vulnerable households.

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Money sent home by workers now largest source of external financing in low- and middle-income countries (excluding China)

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Article by Donna Barne & Florina Pirlea| www.worldbank.org.

The money workers send home to their families from abroad has become a critical part of many economies around the world. Based on the most recent data, remittances, as this money is called, will only grow in importance. Officially recorded remittances amounted to a record $529 billion in 2018, and are on track to reach $550 billion in 2019.

This money is flowing at about the same levels as foreign direct investment (FDI), but if China is excluded, they are the largest source of foreign exchange earnings in low- and middle-income countries, according to Migration and Remittances Brief 31, published by the World Bank Group and KNOMAD, the Global Knowledge Partnership on Migration and Development. In other words, if China is excluded from the analysis, remittances have already overtaken FDI as the biggest source of external financing.

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How digital remittances can help drive sustainable development

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More people in the world have access to financial accounts and tools than ever before. 1_Ih2VtGVLThAmRgcpvx3u9AWith this access, new products and services are being developed to facilitate convenient usage of these accounts. Taking this a step further, healthy financial inclusion incorporates customers’ ability to balance income and expenses, build and maintain reserves, and to manage and recover from financial shocks using a range of financial tools. The most useful financial services are those that provide customers with convenience, and support resilience through enhanced ability to weather shocks and pursue financial goals; effectively supporting the financial health of the user.

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