Migrant remittances overtake foreign aid, lifting many rural families out of poverty
A new IFAD report highlights that migrant remittances have become the largest source of household finance for low- and middle-income countries, surpassing foreign aid and direct investment. These funds serve as a critical, resilient safety net for families facing economic and environmental crises.
Why it matters
Understanding the scale of remittances is vital for global economic policy, as these private flows now significantly outweigh traditional government-led development aid.
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THE International Fund for Agricultural Development (IFAD) recently released a report entitled ‘Sending Money Home’.
The report says that remittances have become the world’s largest and most resilient source of household finance during overlapping economic, environmental and geopolitical shocks.
“Those who receive remittances become more resilient in the end, but what we have seen and is most staggering is that remittances continue to dwarf any flow back to low- and middle-income countries,” said Pedro de Vasconcelos.
De Vasconcelos, manager of the IFAD Financing Facility for Remittances (FFR) and lead author of the report, elaborated: “What we have seen is that both Official Development Assistance (ODA) and Foreign Direct Investment (FDI) combined add to a figure less than what migrants do in sending small amounts on a regular basis back home.”
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