There are currently around 244 million people who live and work around the world, in a nation that is not their home country. What we have seen over the years is that a great volume of these people sends money back to their home country. This money is called remittance and currently each year they amount to around $689 billion. The World Bank has spoken about how they would like to see these figures rise, given the great help that remittances offer with regard to alleviating poverty.
Here is exactly how these remittances support so much in helping those in poverty.
Flow of Cash
The first point to make here is that the flow of remittances largely goes from high-income nations to low and middle-income countries. The amount of remittances that go to a wealthier country is around 2.4%, showcasing just how this money flows towards poorer nations.
A question that is so often raised is why many nations remain impoverished despite economic support over the years from other countries and organizations. The reality however is that so often that money doesn’t get to those who need it, with corruption and red tape often preventing that from happening. When it comes to remittances however we see that money gets directly to those in need, who have finances immediately available to support their life. The volume of remittances has been estimated by the UN to support 1 billion people around the world, a staggering number, most of who are living in impoverished situations.
Use of Money
Further data from the UN shows that around 75% of the remittances received by family members is used on immediate needs, which leaves 25% available for additional purposes. It is this 25% that is so helpful when it comes to encouraging people to live themselves out of poverty. This money can be used on education and training to improve a person’s life and that of their family.
Supporting Local Economy
It is also important that we consider the consequences of this additional money coming into a nation’s economy. Poor families are able to spend their money within the local community which goes further towards supporting small businesses, thus ensuring their survival and further boosting their income. These remittances don’t just help out the family to which they are sent, but they also greatly help the local community in which they live.
The UN is highly committed to making sure that remittances continue to rise and one way in which this will help is through further use of International transfer apps like Ria Money Transfer. These apps offer low-cost money transfers and great conversion rates, ensuring that more money flows back to those who need it. Not only will remittances rise because they cost less when using apps, but they are more secure and much faster, giving more people the confidence to send larger sums of money conveniently.
There is no doubt that the increase in the flow of remittances to those in need, is going to have a positive bearing when it comes to alleviating poverty around the world.