Migrant Remittances to Developing Countries: A Scoping Study - Overview and Introduction to Issues for Pro-Poor Financial Services

This study aims to focus on remittances and their developmental contributions, especially in the area of financial services.

The study examines:

• Remittance flows;
• Channels and transaction costs;
• Related regulation and policies;
• Use and developmental effects of remittances;
• Current trends as well as donor interests.

The key findings of the paper are:

• Remittances represent the second largest flow of capital into developing countries;
• The single biggest contribution of remittances is to the welfare and improved livelihood of the receiving household;
• Remittances contribute to reduced poverty levels;
• Various countries have recognized the business opportunity inherent in remittances and are now providing attractive and innovative services, including integrated financial service offers;
• World Bank initiatives have significantly legitimized the magnitude and role of remittances to a global constituency of financial experts;
• Donors have also recognized the role of remittances and have become interested in ways to facilitate the increased flow and the use of remittances for developmental benefits.

The paper concludes that:

• Remittance and their investments are hampered by inefficiencies and access barriers in financial systems and services;
• Regulatory requirements for financial service providers are also deterrents in accessing financial services;
• Early initiatives to cross-sell financial services with remittance transfers are encouraging;
• Platform initiatives that would bring together interested stakeholders around remittances for exchange, facilitation of linkages and development of good practices would be beneficial.