Remittances are a vital financial resource for millions of families worldwide, supporting basic needs such as food, education, healthcare, clean water, and energy, while also enabling investments in small enterprises and agribusinesses. In 2024, global remittance flows to low- and middle-income countries (LMICs) reached US$685 billion1, surpassing foreign direct investment and tripling official development assistance. In more than 80 countries, remittances represent over 3 percent of GDP, and in several, more than 20 percent.
An estimated one-third of remittances reach rural areas, home to the majority of the world’s poor. As traditional development financing contracts, maximizing the developmental impact of these flows has become increasingly important. Reducing transfer costs, expanding accessibility, and integrating remittances into formal financial systems can significantly strengthen rural livelihoods and resilience.
Digitalization plays a central role by improving the efficiency of remittance transfers, lowering costs, and expanding access to financial services for underserved populations. When integrated into formal financial systems, remittances help households build assets, access savings, credit, and insurance, and invest in opportunities that contribute directly to international development goals.
As a reliable income stream, remittances also serve as a gateway to productive investment. They can be leveraged as collateral for loans supporting small businesses, agriculture, and climate-resilient practices. Tailored financial products for migrants and diaspora communities can further channel these flows into sustainable investments and enhance protection against climate-related shocks.
IFAD’s Inclusive Rural Finance Policy (IRF)3 recognises remittances as an important financial flow for rural households, alongside savings, credit, and insurance. The IRF highlights the need to expand access to remittance services as part of a broader strategy to strengthen rural financial inclusion. It also emphasises the importance of linking remittances to other financial services through digital platforms to enhance rural livelihoods, build resilience, and foster economic opportunities.
Since 2006, IFAD, through its Financing Facility for remittances (FFR), intervenes to enhance the development impact of remittances and diaspora investment in countries of origin by promoting low-cost access to remittances in rural areas, and linking them with inclusive rural financial services and products. Over the years, the FFR has implemented more than 75 innovative projects across over 50 countries, working closely with the private sector, regulators, and civil society organizations to promote financial inclusion for rural remittance-receiving families by expanding access to affordable, convenient remittance services and linking them to tailored financial products.
Objectives and Learning Outcomes:
This event, organized by the Inclusive Rural Finance Network (IRFN) in collaboration with the Financing Facility for Remittances (FFR), aims to highlight to the network the importance of domestic and international remittances in supporting inclusive rural finance.
The session focused on remittances and remittance-linked financial services, underlining the importance of data, the creation of enabling environments, and the role of the private sector in innovating and scaling models. It will explore how remittances can drive financial inclusion and foster rural development, with a particular focus on digitalization and innovation.
The session has:
- Shared global and regional insights on remittance flows, market developments, global commitments, and emerging opportunities and challenges.
- Introduced the RemitSCOPE.org tool, showcasing how data can support inclusive policies and private sector development and innovation.
- Featured private sector perspectives, highlighting innovations in the digitalization of remittances and access to Digital Financial Services.
Introducing RemitSCOPE: A New Platform to Drive Action
IFAD’s Financing Facility for Remittances (FFR) has developed RemitSCOPE.org, a data-driven platform offering country-specific insights on remittance flows, costs, markets, and financial inclusion trends. RemitSCOPE.org equips governments, financial institutions, and development organizations with the tools needed to design evidence-based policies and investment strategies that promote competition, lower costs, and improve financial access, particularly in rural areas where remittances have the greatest impact.
Target Audience: Private sector OTD, IFAD Regional Divisions, GPR, CDs, CPOs, IRF/Value Chain technical experts, including consultants, and Finance in Common representatives, Participants from past IRF events.
