The side event, convened by the International Fund for Agricultural Development (IFAD), the International Organization for Migration (IOM), permanent missions of Mexico and Nepal to the United Nations, on the margins of the Second Session of the Preparatory Committee for the 4th International Conference on Financing for Development (FfD4) highlighted the transformative role of family remittances and diaspora investments in financing the SDGs and enhancing resilience. It provided a platform for governments, the UN system, civil society, the private sector, and other stakeholders to share strategies, partnerships, and initiatives, with a focus on leveraging digitalization for greater financial inclusion. The event amplified the recommendations outlined in the IFAD-IOM policy brief, supporting Member States’ efforts in the FfD4 preparatory process.
Dec 5, 2024 11:30 AM - Dec 5, 2024 2:00 PM | Author: FFR
Remittances and diaspora investments represent one of the greatest opportunities for rural communities to build climate resilience and sustainable land use in Africa, thereby improving life chances and reducing migration. These resources can promote greater climate adaptation in rural communities, improving economic security, reducing the incentives to migrate, and encouraging the eventual return and reintegration of migrants.
The International Fund for Agricultural Development (IFAD) and the United Nations Convention to Combat Desertification (UNCCD) have partnered to contribute to the Sustainability, Stability and Security (3S) Initiative in Africa. This partnership seeks to enable rural remittance families and their communities to build climate resilience and improve sustainable land management, thereby enhancing livelihoods, food and water security, rural youth employment, and reducing the incentives for migration due to climate change.
The side event was an opportunity to present IFAD-UNCCD approach to “Leveraging Remittances and Diaspora Investment for Climate Resilience and Sustainable Land Use” and the main findings of new recent reports on migrant remittances and diaspora investment as a resource for climate resilience in a structured dialogue with UNCCD national focal points, donors representatives and key stakeholders.
The Remittances and Development Program (PRYD) carried out by the Center for Latin American Monetary Studies (CEMLA), together with the International Fund for Agricultural Development of the United Nations (IFAD) hosted the Annual Meeting of The Remittances Program and Development and Presentation of The Remitscope LAC Platform at CEMLA´s headquarters in Mexico City, on November 29, 2024, from 9:00 to 13:15 hrs, Mexico City time.
The first step for the effective analysis of policies that could improve the productive use of remittances and support the development of recipient households and LAC countries is to have information, organized, structured, and easily accessible, that allows evaluating the aspects key to remittance, migration and their relationship with development, which will allow identifying possible measures that can support decision-making in these cases. To achieve this, RemitScope LAC, which includes all the information available on different aspects of remittances, migration, and their relationship with financial inclusion and development has been developed.
To create the platform, information was consolidated through online data, consultations, surveys, and interviews in each country, as well as with the participation of some Central Banks that complemented the official information on these topics.
The event aimed at officials from central banks, bank superintendencies, financial sector supervisory entities, statistical institutes, officials from the remittance industry, and others involved in the issue of migration, remittances, and development.
The event was in person and virtual format, in Spanish with simultaneous translation into English.
On behalf of CEMLA, the event is coordinated by René Maldonado, +52 55 5061 6663, rmaldonado@cemla.org; supported in logistics by Rocío Ramírez Peña, +52 55 5061 6663 mramirez@cemla.org.
In Guatemala, remittances are a fundamental pillar of the economy, with millions of families depending on them for their daily sustenance. In 2023 alone, Guatemalan migrants sent US$19.8 billion home, representing 20 per cent of the national GDP. These resources are essential for many families, allowing them access to better nutrition, education, healthcare and even the ability to save and invest. However, despite knowing the positive impact of these flows on the national economy, the potential of remittances is often limited by structural obstacles such as high rates of financial exclusion, lack of access to digital financial services and insufficient information about this market.
Aware of these challenges, the International Fund for Agricultural Development (IFAD) is organizing an event that convenes presenters and strategic participants to deepen the dialogue around remittance flows in Guatemala. The objective is to explore innovative strategies to maximize the development impact of remittances, focusing on improving financial inclusion and leveraging digital tools to expand access to financial services, especially in rural areas.
The event acted as a platform for key stakeholders, such as policymakers, financial institutions, remittance service providers and international development agencies, to engage in a constructive dialogue.
Current trends and challenges in the remittance market were presented, and opportunities to foster sustainable development through improved financial and digital inclusion strategies for the Guatemalan population discussed. The meeting established a collaborative network in order to strengthen alliances and share best practices to optimize the remittance market in the country. It aims to lay the groundwork for possible future initiatives to increase the effectiveness of these flows for the country’s economic development.
The main objective of the event was to promote financial inclusion through tailored strategies that improve access to and use of financial services for remittance beneficiaries, especially those residing in rural areas. The event aligned with the objectives set out in the ENIF 2024-2027, driving collaborations that enhance financial inclusion for remittance recipients through digital solutions and tailored financial products. Emphasis was also placed on the importance of digitalization within the remittance sector. By innovating and expanding digital payment platforms, the aim is to create more efficient, accessible and cost-effective remittance transfer channels. This digital transformation is essential to overcome geographic barriers and improve financial access in remote communities.
The event highlighted initiatives such as the RemitScope LAC. This tool was launched and presented for the first time in the region during the event, that provides complete and accurate data on remittance flows in Latin America and the Caribbean, thus improving information collection and dissemination practices. With RemitScope, market players will be able to develop more effective strategies and policies to maximize the development impact of remittances, empowering them with reliable information that fosters informed decisions and a more inclusive and efficient financial ecosystem.
In recent years, digital remittances have gained significant traction due to the proliferation of mobile networks, the emergence of fintech startups, and initiatives promoting digital payments. As a result, the volume of remittances to Africa has been growing steadily over the past decade. The advent of digital technology has revolutionized various sectors globally, and the remittance industry is no exception. It has facilitated easier and more cost-effective transfer methods.
Mobile money services, in particular, have seen a surge in usage as a major remittance channel, facilitating financial inclusion and promoting the development of an entire related ecosystem. The transition into the digital age and the adoption of digital remittances presents a new set of challenges. Yet, understanding these challenges is the first step towards overcoming them and unlocking the potential of digital remittances
This webinar shed light on the considerable developmental potential of the digitalization of remittances, positioning them as pivotal contributors to Africa’s development agenda.
