International remittances play a key role in rural development. Remittance flows into low and middle income countries are greater than both foreign direct investment (FDI) and overseas development assistance (ODI). Around half of global remittances sent to developing countries end up in rural areas. This is where the world’s poorest and food insecure live. These remittances go directly into the hands that need them most and are the only social payment safety net for many people in a time of crisis. This has seen remittances rise up the priority list of the international community as a response to building resilience during the current pandemic.
Yet the costs of sending remittances remains stubbornly high, greater than twice the SDG 10.c target of 3% on average for formal sends. Informal sending bears even greater sending and security costs. Digital and mobile are seen as an opportunity to reduce these costs and moving informal flows to formal. There are however barriers to doing this. Last year our Director, Killian Clifford spoke on this issue at the at the observance event to mark the International Day for Family Remittances hosted by IFAD at the United Nations Headquarters in New York in 2019. You can watch the clip below.