The International Day of Family Remittances

Digital Remittances Towards Financial Inclusion
and Cost Reduction

People travel to far-off countries in search of prosperity. For many, it is an opportunity to enhance their quality of life and help their families in their home country. Recognising the importance of family remittances, the UN in 2018 adopted a resolution to observe June 16 as “The International Day of Family Remittances”. Family remittances support one in nine people around the world. The theme of this year’s observation draws attention to the positive effects of digitalisation on the ease of fund transfer. Over the last 20 years, remittances have seen a five-fold increase. Since 2008, India has been the largest recipient of remittances. Adopting Digital remittance services made the process easier and cheaper. Significant barriers to digital remittance and financial services still exist, and there is a need to address them on priority. The observations of days like this are to acknowledge the contributions made by migrants and reflect on and celebrate the work.

Celebrating the Successes

People travel to far-off countries in search of prosperity. For many, it is an opportunity to enhance their quality of life and help their families in their home country. The migrated people must endure several challenges, from adopting the new culture and food habits to living away from the near and dear ones. Family remittances are transfers from people living abroad to family members in their home country. Recognising the importance of these remittances, the UN in 2018 adopted a resolution to observe June 16 as “The International Day of Family Remittances”. It is an observation to mark the contributions made by millions of people living in countries far from their homes to the well-being and progress of their families.  

Not a New Phenomenon

Family remittance is not a new phenomenon. In the 19^th century, several European countries depended on remittances from their emigrants. Italy, at the beginning of 1900, enacted a law to protect remittances. The efforts to reduce the costs for the receipt of the remittances intensified in the 60s. In 2008, the World Bank established the first international database of remittance prices.

Lifesaver for Families

Family remittances support one in nine people around the world. There is a need to ensure that the process is supported and that the framework for remittance is made more accessible. The theme of this year’s observation draws attention to the positive effects of digitalisation on the ease of fund transfer. The need is to reduce the cost of sending money home, improving access, and advancing financial inclusion. Even if the individual remittances are of small value, they are more than three times the global official development assistance.  

Migrant workers sent ~670 billion dollars through family remittances in 2023. Over the last 20 years, remittances have seen a five-fold increase. One billion people are involved in remittances, either senders or receivers. Ninety-one million are women, and 50% of estimated remittances are sent worldwide through digital channels. More than 80 countries depend on these remittances. 75% of the money received is spent on meeting their immediate needs, reflecting how important receiving these remittances is. By 2030, the remittances are likely to exceed 5 trillion dollars. Most of the money goes to people living in rural areas.

Since 2008, India has been the largest recipient of remittances. There is almost no country in the world where Indians are not residing, either for study, work, or permanent residence. There are many countries in the world where many Indians live. Mauritius (~70%) is topping them, followed by the UK, UAE, Saudi Arabia, Canada, Oman, Singapore, and the USA. One of the studies indicates that over 148 billion dollars in remittances left the United States in a year. Mexico received the highest, followed by China and India.

Making the World Better

The past two decades have seen the flow of funds through these remittances increasing five-fold. Remittance costs have decreased significantly. Adopting Digital remittance services made the process easier and cheaper. Still, there are challenges. Many people do not have bank accounts and cannot access digital services. Most unbanked adults worldwide are women. Significant barriers to digital remittance and financial services still exist for many people, especially among the most marginalised and many living in rural areas. The UN has appealed to the governments and financial institutes to take steps to make these flows easier.  

Remittances are fundamental to achieving all of the SDGs.
Alvaro Lario, President IFAD

The remittances from the migrants and diaspora directly support millions of families, leading to the realisation of Sustainable Development Goals (SDGs). It leads to poverty alleviation and economic growth, particularly in rural areas and fosters greater social and financial inclusion. The observations of days like this are to acknowledge the contributions made by migrants and reflect on and celebrate the work. Also, to recognise the collaboration and partnerships involved by so many, including financial service providers, money transfer operators and regulators. Acknowledge the role they played in facilitating a more straightforward remittance process.

Making the World Better
Without Leaving Anyone Behind.

Toons: Reema    
Logs: M Sai Baba
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