When the pandemic struck, experts forecast a massive dip in global remittances. These forecasts though didn’t consider the power of human emotion in connecting the world’s 200+ million migrant communities with their families back home.
Negating all forecasts, the remittance industry saw a drop of only 1.6 per cent in 2020 and went beyond expectations to record a growth in 2021. A familial bond holds an intangible value, as the numbers prove. This year, the International Day of Family Remittances - celebrated annually on June 16 - comes at a time when the world is grappling with a heightened sense of economic insecurity.
While economies will struggle and jobs affected, the migrant worker’s role in strengthening the social contract with their loved ones has gained newfound attention. The sacrifice and hardship of the world’s migrants are a precursor to the $600 billion and more remitted every year. Over 800 million families rely on this flow to supplement their income shortages and lead a qualitative life. The role of remittances in upholding the UN’s Sustainable Development Goals cannot be discounted, although it only forms half the story of family wellbeing.
Enabling financial inclusion for families
Equitable financial inclusion remains the ultimate KPI of a society in progress. In developing economies, families at the receiving end of remitted money often have little understanding of avenues for savings and investments. Yes, the money is coming in, but it’s always risky to be dependent solely on it for sustenance.
In this regard, it’s important to empower families and create opportunities for easier access to finance, as well as to invest one’s human capital into income streams to grow their standard of life. Conjoining this other half of the spectrum with the remittance economy is thus critical to ensure a migrant’s contribution reaps good dividends at a family and community level.
Financial literacy takes top priority in this regard. The onus is on multiple stakeholders connected to the financial services ecosystem to bridge the gap so that this flow of money acts as capital or source of investment for families to take the next step in wealth creation. This will ultimately have a far-reaching impact on shaping several aspects of community development by promoting entrepreneurship and a yearning for sustainable livelihood in the society.
Programs around financial literacy aren’t new, but tying their objectives with beneficiary families is bound to have a greater scope in unlocking societal development. In an uncertain world, there cannot be a bigger contribution to advance the cause of financial inclusion, while simultaneously honoring the efforts of those remitting their hard-earned money.