According to the latest World Bank report, remittances to developing countries (USD 647 billion in 2022, USD 656 billion in 2023) are now larger than the sum of foreign direct investment (440 billion) and development assistance (202 billion).
In this article, we explore the enduring strength of remittances in the face of adversity and why we continue to be passionate about bridging the gap in financial access.
Tangible expression of love
Remittances are fueled by the love, commitment and support within families. We have seen many examples around us - a father working abroad sacrifices all to send money back home, sons and daughters who tighten purse strings to support their parents at home and couples separated by distance but connected through remittances. Remittance is the tangible expression of this sacred and unbreakable bond between family members, transcending distance and bringing comfort to both senders and beneficiaries.
Defying the odds
At the start of the Covid-19 pandemic, experts predicted a massive decline in remittances to developing countries, owing to governmental measures and lockdowns. Instead of freefalling, remittances defied the odds by not only stabilising globally, but rising in some countries. It would appear that recessions in host countries were dwarfed by the incessant need of migrants to send remittances home. Usually traded in a safe-haven currency, remittances also have an uncanny ability to stay shielded from local fluctuations. This counter-cyclical nature has made remittances an invaluable buffer against economic shocks.
Empowering local economies
As remittance flows enter a country, they spark demand for goods and services, creating a multiplier effect that stimulates economic activity and generates job opportunities. Small businesses benefit greatly from increased consumer spending, fueling grassroots growth and development. Remittances are a leading source of foreign exchange in some countries, bolstering a nation against headwinds.
Unleashing development potential
Increasingly, governments, financial institutions and development organisations are focused on harnessing the resilience of remittance for sustainable development. By creating an enabling environment, policymakers ensure that remittances are channelled towards productive investments, maximising their impact. In at least 2 regions where Tranglo is strategically positioned and productive, developments are in place. ASEAN 5 - Malaysia, Indonesia, the Philippines, Singapore and Thailand - have signed an MoU to make multilateral payment connectivity a reality. Project Nexus will make remittances cheaper, faster and more transparent in Southeast Asia. In Europe, SEPA allows its residents to send cashless payments anywhere in the EU and beyond, minimising frictions and changing the remittance landscape forever.
Beacon of hope
Remittances are a beacon of hope for families and communities worldwide. In the face of economic uncertainties and crises, they are resolute, empowering local economies and nurturing development. More and more institutions are recognising their potential to create more inclusive economies and foster financial inclusion, joining in the race for equitable and sustainable growth.
