Remittances — the money people send home to their families from abroad — account for the biggest source of external finance for low- and middle- income countries. But what do we know about where this money goes and does it help reduce poverty?
Discussions about development funding tend to focus on official cash flows from institutions and donors, known as official development assistance, or ODA, and foreign direct investment, or FDI.
But these flows have been overtaken by an overlooked funding stream — remittances — which actually make up a far greater portion of the money entering lower-income economies.