Remittances: Money Sent Home

Remittances are money that migrants send to family in their home countries, and they have become one of the largest flows of money to developing countries. According to the World Bank, remittances to low- and middle-income countries amount to hundreds of billions of dollars a year and from 2019 they exceeded foreign direct investment to these countries when China is excluded. For some countries, such as Tajikistan, Nepal and Tonga, remittances equal a fifth or more of GDP.

Unlike aid, remittances go directly to households, which use them for food, schooling, health care and housing, and they tend to be stable or even rise during disasters at home. However, heavy dependence can leave economies vulnerable to downturns in host countries and may reflect a lack of opportunities at home. Fees have been a concern too, so the Sustainable Development Goals aim to cut average remittance costs to below 3 percent; mobile money services have helped lower costs.