To mark this year’s International Day of Family Remittances, the United Nations Network on Migration calls on Member States, the international community, the financial industry and all relevant stakeholders to step up efforts towards increasing the socio-economic impacts of remittances by reducing the transfer costs and
fostering the access to and use of digital solutions for faster, safer and cheaper remittances to insure the financial and digital inclusion of all migrants and their families back home. In 2022, remittances to low- and middle-income countries surpassed USD 647 billion and are forecast to reach USD 656 billion in 2023, exceeding by over three times official development assistance and exceeding foreign direct investment to those countries.
The steady increase in remittances demonstrates migrants’ resilience and the significant contribution they make to their families, communities and countries of origin. Globally, 800 million people – about 1 in every 9 people worldwide – live in households receiving international remittances. In some countries, more than 30 percent of all children have at least one parent who works and lives away from home. By providing a source of income to support basic needs and by supporting economic growth, job creation and social development, remittances play an important role in achieving the SDGs. Remittances help alleviate poverty (SDG 1) by providing a steady source of income to recipient households, pay for basic expenses such as food (SDG 2), shelter, health and education (SDGs 3 and 4), all contributing to human capital development. They can help build resilience to economic shocks and crises, as evidenced during the COVID19 pandemic, and to the impacts of climate change. This is particularly true in rural areas, where remittances support communities in adapting to shocks like illness or crop failure that affect the financial health of the most vulnerable. By supporting sustainable agricultural practices, such as investing in drought-resistant crops or water-efficient irrigation systems, remittances can, too, enable communities to adapt to changing climate conditions (SDG 13). Remittances also importantly contribute to reducing inequalities (SDG 10) by providing a critical source of income to households that may be excluded from formal financial systems, and by empowering female heads of recipient households (SDG 5).
Remittances also play a critical role for families in places where social safety nets are absent or out of reach, and are often a key support for children’s development, including physical health, mental health, and education. While also supporting investment in infrastructure and in other productive sectors, it is estimated that around a quarter of remittance flows is saved and invested in the local community, supporting small businesses and contributing to decent job creation and economic growth (SDG 8). Despite the multiple benefits of remittances, significant challenges remain to fully enable the access to and use of formal remittance channels. The cost of sending remittances, estimated at 6.3 percent in 2022 is a major one: this percentage is still far from the 3 percent SDG 10.c target. This high cost is a significant barrier for low-income households, who cannot maximize their income and may not be able to afford the fees associated with sending and receiving remittances.
