Each year, migrants around the world send money back to their home countries to help relatives cover basic expenses like food or clothing, or launch small businesses to secure stable incomes. Their total remittances are expected to reach $436 billion this year — thrice as much as the $134.8 billion total development aid in 2013.
Remittances certainly play a substantial role in ensuring sustainable livelihoods in recipient countries, but their potential is still largely untapped. Poor financial literacy among senders and recipients, high transfer fees and tightening regulations around money service providers are just some of the factors that render remittances underutilized.
What’s more, the World Bank estimates that an additional $500 billion may be lying dormant in savings accounts held by migrants in high-income countries. Surveys also indicate that diaspora communities are hungry for other ways to contribute financially to the development of their home or heritage countries, through targeted investments and other business opportunities.