You might be one of the immigrants living abroad while reading the following blog. We assume you financially support your family back home but never thought about the impact and the importance of your action in the overall local economy.
Let us explain why your contribution matters and why you’re becoming a global economic force to your native country’s sustainable development.
As the world becomes more connected, the opportunity to move abroad in search of a better life is becoming more common.
This may sound easy but it is immensely challenging for any immigrants, including you, to commit to spending your hard-earned money in supporting your families and communities back home, while making an effort to build a new life in your new host country.
Impact of Covid -19 on remittances
Remittances are known as the engine that drives financial development, through their positive impact on consumption, savings, and investment in recipient countries. However, with the outbreak of the Covid-19 pandemic it is indeed disturbing all aspects of our life. Rising inactivity levels such as unemployment hits immigrants' incomes, and affects the migration of money flows in the recipient countries.
Since 1990 the financial remittance flows have gradually increased in terms of volume. Following the record of global remittances of $554 billion (Euro 503 billion) in 2019, the World Bank foresees the shrink of flows by 14% this year due to the pandemic situation.
Nevertheless, there is a positive development throughout this period. Many digital services facilitating transfers of remittances have technologically advanced, focusing on reducing the costs of sending and receiving remittances.
800 million people worldwide benefit from the money sent by their family members
Today, one billion people in the world or one in seven are regularly involved in transferring money, either sending or receiving. From 272 million international immigrants around 200 million migrant workers sent money to an estimated 800 million. This money being sent by their family members.
Around 75% of the money sent back home issued to put food on the table, cover medical expenses, or for education. The remaining 25% of remittances are believed to be invested in asset-building, business activities or even start-ups.
For example, you send money to your brother back home to buy cars, enabling him to start a small taxi fleet.
Remittances help reach the SDG-s.
Money remitted by you as an immigrant is recognized as a vital development agent's vehicle, which helps reach and sustain at least 7 of 17 Sustainable Development Goals adopted by all United Nations Member States. According to the statistics, an average immigrant regularly sends home about $200 -$300.
It might seem like a small amount, but this makes up 60% of the total household income. This can eventually lead to improving the living standard of the family and community back home.
Sending money efficiently and cheaper
As mentioned earlier, in the last few years, the advancement of digital technology has provided financial access to everybody. Admittedly, there are many ways to transfer money abroad, though, to save time and money you should carefully plan your transactions.
Sending cash through traditional money transfer agencies can cause delays but can also come at a high cost. Some other digital money transfer platforms might charge you a commission fee based on the amount you sent to your loved one.
Fees definitely matter more than you think. According to the World Bank Remittance Price Worldwide database, the average cost of sending remittances costs 6.51% of the amount sent.
We at OneFor can help you avoid some of these situations. We charge a fixed price for any amount you send via our mobile app. Money moves within 0.2 seconds and your loved ones receive funds just on time. Discover more about how OneFor app works here.