Each year, June 16 is globally recognized as International Day of Family Remittances (IDFR), as established by the United Nations (UN). The core goal of IDFR is to recognize the transformative impact of remittances, specifically those from over 200 million migrants (half of them women) to their 800 million family members worldwide. An estimated half of these annual flows end up in rural areas where remittances are vital to aiding those afflicted by poverty and hunger. IDFR also promotes the UN’s Sustainable Development Goals (SDGs), specifically SDG 10, which includes the goal of lowering the costs of migrant remittances to below 3% by 2030 as part of an overall effort to reduce inequality within and among countries. Each of the 17 SDGs established is part of a global plan that aims to sustainably protect the environment and improve human lives worldwide.1
The IDFR theme for 2023-2024, “digital remittances towards financial inclusion and cost reduction,” focused on digital remittances, their impact on reducing costs, and how they are enabling more inclusion amongst senders and recipients of the most vulnerable groups. According to World Bank, 2022 remittances to low- or middle-income countries (LMICs) grew to $626 billion, an estimated 5% increase from 2021.2 As of recent data, although mobile remittances were the cheapest way to send remittances of $200 to LMICs, costing only approximately 3.73% as compared to the much higher average of 6.3%, digital transfers continue to make up only a small percentage of the total of all global flows.3,4
The difference between these cost percentages is extremely significant in practical terms for the communities most in need. According to the UN, 75% of remittances to LMICs pay for immediate needs such as food, housing, healthcare, or sanitation.5 Every cent matters when remittances are going directly to the bare necessities needed to survive, and digital developments in the remittance industry are helping to significantly lower the cost. The hope of these lower costs is to build greater long-term financial resilience for vulnerable populations who rely on remittances for a significant portion of their needs.
With the cooperation of international participants, both public and private, the push to better the lives of those relying on remittances and to promote financial inclusion through technological advancement is picking up steam. Please visit the website for the International Fund for Agricultural Development, an agency of the UN focused on addressing hunger and poverty in rural areas of developing countries, for further information at https://familyremittances.org/. Housed here are several resources, ranging from brochures to links to study results, that can be used by remittance providers to understand their place in fostering the financial inclusion of migrants and creating innovations that allow for remittances that are faster, safer, and cheaper.
Consider participating in IDFR this June to help improve lives worldwide.
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2 https://www.worldbank.org/en/news/press-release/2022/11/30/remittances-grow-5-percent-2022
3 https://familyremittances.org/idfr-2023-24/
4 https://www.gsma.com/mobilefordevelopment/mobile-money/
5 https://documents-dds-ny.un.org/doc/UNDOC/GEN/N18/182/46/PDF/N1818246.pdf?OpenElement
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