Last updated on August 15th, 2023 at 11:03 pm
If you’re someone who regularly sends money home to support your family, you’re not alone. In fact, with so much of the global population on lockdown and workers facing continued disruption, the spotlight has once again fallen on the importance of remittances to support the global economy and the knock-on effects that the crisis is having. The World Bank is predicting global remittances will drop by about 20% due to the impact of coronavirus, to $445bn in 2020.
At Remitly, we understand the importance remittances have on your lives and the global economy. We know that it’s not just money that you are sending. It’s a representation of your hard work, commitment and sacrifice. Each remittance sent represents a promise kept to a loved one. We are always inspired to hear about the multitude of reasons our customers use Remitly, and the difference their investments makes all over the world, now more than ever.
According to UN News, remittances allow for millions of families to regain their financial autonomy, with 75% of remittances used to put food on the table and cover medical expenses or housing expenses.
Sending remittances is a considerably more efficient method of getting funding straight to those who need it, thanks to the direct nature of being able to send it to an individual. As a result, the much-needed support can go directly into the heart of local communities for essential support in a way that government aid cannot. The amount of money flowing from developed to developing countries has increased dramatically in recent decades, reaching $554bn in 2019; which surpassed global foreign direct investment.
The availability of work in developing countries is often infrequent or seasonal by nature and thus, it is a common struggle to secure a steady income throughout the year. Many families rely on remittances as a crucial lifeline during periods of unemployment. With the increasing uncertainty around the world right now, this support is needed more than ever.
Remittances also have a profound impact on education. According to the United Nations Development Program (UNDP), studies have shown that children in remittance-receiving families have a lower school drop-out rate, and often are able to leverage this financial support to invest in private tuition. The impact of this support cannot be overstated. In fact, the improved access to education can often have a significant social return by way of reduced poverty as children grow up better skilled and able to enter different career paths. This also increases entrepreneurship which in turn directs more capital to the economy, bringing the benefit full circle.
Over the coming weeks, in the run up to The International Day of Family Remittances (IDFR), we will be showcasing some of the reasons customers trust us to send their money and celebrate their stories.