Migrant Remittances to Developing Countries

This study aims to offer an introduction to remittances and their developmental contributions. The study draws on:

• Research by the author;
• Inputs from key informants on developmental and commercial initiatives around remittances.

It examines:

• Remittance flows;
• Channels and transaction costs;
• Related regulations and policies;
• Uses and developmental effects of remittances;
• Current trends;
• Donor interests.

The report finds that:

• Remittances constitute the fastest growing and most stable capital flow to developing countries;
• Official statistics neglect domestic as well as intra-regional remittance flows;
• Remittances contribute to the welfare and improved livelihood of the receiving household, and to informal lending;
• The benefits of remittances spill over into the local economy and community development projects;
• The overall benefits of remittances overweigh actual or potential drawbacks;
• There is a global recognition of the significant role of remittances in capital flows to developing countries;
• Donors have also become interested in the developmental aspects of remittances;
• Inefficiencies and access barriers hamper remittances and their investment in financial systems and services.

The paper concludes with the recommendation for a platform initiative that would bring together interested stakeholders for exchange, facilitation of linkages and development of good practices.