Theme: Remittance Families and Development

The world is getting hotter, rainy seasons less predictable, storms more intense and in many places there is either too much water, or not enough– always in the wrong place and the wrong time! Global climate change is experienced locally by people across very different places and circumstances. For the rural poor in Africa, Asia and the Pacific and Latin America and the Caribbean this threat poses an ongoing humanitarian crisis. Extreme drought, floods, heatwaves, storms, and other climate hazards worsen poverty, threaten food and water security, health, livelihoods and settlements. 

Consider the smallholder farmer in Mali, Guatemala or the Philippines who looks skywards and observes that “the rainy season never starts or stops when it used to, sometimes it begins slowly and then at the end, we get floods…in other seasons we begin with heavy rains and end in drought.” For smallholders who rely on crops to feed their families and livestock, shifting precipitation patterns can be life threatening.  Fishers, herders and forest enterprises are also negatively impacted by a changing climate that contributes to land degradation, desertification, deforestation and shifts in the ranges of animal and plant species.  

Farmers in Mali

Smallholder farmers and other rural livelihoods struggle to adapt to this growing set of risks in the face of declining economic opportunities and life chances.  But most lack the know-how, tools, and finance needed to better protect themselves from climate change. Consequently, migration becomes a rational choice, particularly for rural youth.  Migration is in many ways an investment decision for rural families, and the financial returns from migration can help in creating the economic opportunities that make such decisions less necessary in the future. 

The main financial returns from migration are remittances – the money that migrants send to loved ones back home and they represent a vital financial lifeline for millions. In 2023, remittances to low- and medium-income countries were an estimated US$656 billion, resources that helped families with household expenses, including education and health and productive activities. In fact, remittances to these countries are more than three times Official Development Assistance (ODA) and for most developing countries these flows are more than the total of ODA and foreign direct investment (FDI).

Diaspora investment is another financial outcome generated by years of migration. These investors are migrants who settle in host countries and invest in productive activities in their countries of origin. These successful migrants invest across many sectors, including agriculture and land, and directly in enterprises. Many support entrepreneurial start-ups and bring a wealth of financial and business experience to local economies back home.

A good example of one such diaspora investor is an IFAD partner, Ciwara Capital, a venture capital fund owned by the Malian diaspora.  Ciwara Capital recently invested in SOPROTRILAD, a Malian rice company with 400 employees that supports over 3000 small rice producers. Ciwara investment has enabled the implementation of the System of Rice Intensification (SRI) to reduce greenhouse gas emissions, water and fertilizer use and to increase crop yields.

Co-founders of Ciwara Capital

Is there scope for a programme to facilitate the use of migrant resources, both remittances and diaspora investment, for building climate resilience, generating local economic opportunities and eventually reducing the incentives to migrate?

For instance, evidence indicates that remittances help families better cope with climate change in agriculture and related rural activities. Remittances enable the purchases of resilient products and tools, such as new seeds, crops, water conservation tolls and a host of climate smart practices. IFAD pilot projects show that rural recipients will invest a portion of their remittances in climate resilience when given the right tools and incentives, thereby increasing agricultural productivity and the ability to withstand climate shocks. Scaling these models could empower more rural families to use their funds for resilience in sustainable ways.

These actions could include better financial options and know-how for families, such as low-cost microloans for resilient farming, climate insurance and other financial products that broaden the choices, information and know-how for remittance recipients and senders. Lower transaction fees for sending remittances for climate-related uses or savings programs designated for climate-resilient assets would also encourage greater resilience without infringing on the private nature of these resources.

Smallholder farmer in Mali

Toward this end, IFAD’s Financing Facility for Remittances (FFR) will launch a global programme, ResilientRemit, to maximize the impact of migrant remittances and diaspora investment for improving rural climate resilience and the sustainability of land use and other forms of natural capital, while increasing livelihoods, economic opportunities and reducing the incentives for migration.

ResilientRemit will scale innovative remittance-linked solutions, including technical and financial products that support climate resilience and sustainable practices, as well as business and financial models that facilitate diaspora investments in rural climate resilience. The programme will build know-how for smallholders and other rural enterprises, expand employment skills for rural youth, women and other disadvantaged groups.  ResilientRemit will leverage IFAD projects and partnerships to broker opportunities for youth training and apprenticeships for decent employment. These could include IFAD Agribusiness Hubs, where available, and building on the impact of other IFAD projects such as the Rural Enterprise and Remittance Programme (RERP) in Nepal that provided migrant households with financial education and training in climate resilient agriculture among others.

Financial literacy training to women in rural Nepal

ResilientRemit will conduct market assessments that provide the first standardized collection of data on “green remittances,” including the behaviour and strategies of remittance senders and receivers, diaspora investment and related opportunities for improving rural resilience and reducing the incentives for migration. The programme will share learnings and strategies for enabling frameworks that facilitate the use of remittances, and will forge partnerships with national and international public, private and civil society stakeholders on leveraging migrant resources for adaptation and resilience and reducing rural migration. ResilientRemit can provide the incentives, know-how and options that can enable the financial fruit of past migration to sow the seeds for rural resilience and opportunity that will allow more youth to remain and come home.

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