Remittances are a key driver for poverty alleviation in low- and middle-income countries, with transaction levels often exceeding those of official development assistance (ODA). Supporting safe, affordable and accessible remittance services is key for sustainable development. And it offers also a gateway to larger financial inclusion.
Many families in countries of origin rely on remittances to pay school fees and access health care. The money received is a safety net for millions of people in the Global South. Yet the way remittances are sent by migrants is often costly, unsafe, time-consuming and via cash. And there is an untapped potential of linking remittances to other financial products such as savings, or credit, pension funds and insurance schemes.
What do we mean with financial inclusion of migrants?
Financial inclusion of migrants and forcibly displaced persons (FIM) is the process of addressing these groups’ financial constraints to improve their access to and use of affordable and adequate financial products and services. This ranges from traditional financial services and products (credit, savings, etc.), to more complex financial services (insurance, pension, etc.), as well as digital financial services (mobile money, payment services, etc.). FIM aims to rebuild economic livelihoods by providing options and making it easier to take informed financial decisions, to save and spend responsibly, and to transfer funds safely. The financial needs of migrants differ according to their stage in the migration cycle. They also differ from the needs of people who have not moved within a country or abroad. This is why it is important to take a particular look at migrants and forcibly displaced persons to ensure that the “Leave No One Behind” principle of the 2030 Agenda is applied.
SDC's learning journey
Financial Inclusion of migrants and forcibly displaced persons is a topic that is reflected in the portfolios of different SDC offices of SDC. The Network Migration and Forced Displacement, the SDC Financial Inclusion Focal Points and H-Operations' Cash Experts thus launched this learning process. The Learning Journey offers a platform for exchange and learning between SDC staff and will help colleagues to develop and accompany their programmes through a deep-dive into key topics and trends.
Topics touched upon during the Learning Journey include:
- Key concepts and joint understanding of terminology around financial inclusion and links between financial inclusion, cash-programming and social protection.
- Public-private partnerships in the field of financial inclusion of migrants and forcibly displaced including questions around the business case, how to foster meaningful partnerships and ensure consumer protection.
- Informal and formal remittance channels.
In case, you wish to join this Workstream, consult the following link.
