Every year, over 200 million migrant workers and diaspora members send money back home, which is called remittances, helping around 800 million of their family members. A big chunk of this money ends up in rural areas, where it acts as a financial lifeline and strengthens resilience against shocks.<\/p>\n\n\n\n
With the right investments, these capital flows can become a strong engine for economic growth. Over the past decade, remittances to low- and middle-income countries have exceeded USD 5 trillion and have continued to rise despite the pandemic, political instability, and other global disruptions.<\/p>\n\n\n\n
IFAD hosts the Remittance Finance Mechanism (RFM) and leads the International Day of Family Remittances. Remittances are therefore at the heart of its mission. The Fund invests in rural communities\u2019 capacity to make the most of this capital by financing projects that promote innovation and strengthen digital infrastructure.Remittances are becoming an increasingly important priority for member states and donors, and IFAD is working to strengthen and make the most of this very important lever for rural transformation. Partners like the French G7 Presidency, the official partner of the 2026 edition of International Family Remittances Day, help promote the role of remittances in developing rural entrepreneurship, employment, and resilience.<\/p>\n\n\n\n
Encouraging innovation with remittances
Digital infrastructure is essential to maximize the impact of remittances: it cuts costs, enhances security, and allows recipients to get the money without long or expensive trips. A large part of IFAD’s investments aim to innovate in this area; beyond its partnerships with public institutions, the Fund works with the private sector to strengthen remittance markets.<\/p>\n\n\n\n
As part of the EU-funded PRIME Africa program, IFAD worked with 18 private institutions to expand access to the formal financial system and digitize remittances for nearly 1.5 million people across seven African countries. Over five years, private partner investments accounted for more than 40% of the project’s total amount, showing a strong commitment to scaling up innovative solutions.Building on these experiences, IFAD and the Italian Agency for Development Cooperation (AICS) launched the Diaspora RemitInvest program, aimed at maximizing the impact of remittances on rural development in Senegal and Mali.<\/p>\n\n\n\n
In Senegal, remittances account for about 10% of GDP. In Mali, they amount to more than 5% of GDP. Italy \u2013 home to around 150,000 members of the Senegalese and Malian diasporas \u2013 is a key corridor, with flows to Senegal estimated at 310 million EUR in 2025.<\/p>\n\n\n\n
Through blended financing mechanisms, Diaspora RemitInvest aims to channel diaspora resources more effectively. By integrating digital remittances with complementary financial services, the selected projects will help rural families save, invest, grow businesses, and better manage risks.The IFAD-EU ResilientRemit initiative goes even further in risk management by suggesting investing remittances and diaspora funds in actions that promote climate resilience. Implemented in Honduras, Senegal, and Pakistan, the program helps households receiving remittances access financial services to repair their homes after climate shocks, invest in renewable energy, diversify their income, and adopt resilient farming practices.Strengthening financial inclusion Access to financial services is just a first step. IFAD\u2019s investments also ensure that remittances lead to lasting financial inclusion. Because these funds don\u2019t come directly from the economic activities of small producers, they often increase immediate income without automatically improving the household\u2019s overall financial situation or access to credit. In Uzbekistan, IFAD and the European Union are working with Hamkorbank under the REMIT\u2011PRIME program to change this dynamic. A flagship initiative targets nearly 4,000 households receiving remittances and returning migrants, thanks to a new credit scoring model based on remittances. In this system, funds sent by family members working abroad\u2014as well as savings from returning migrants\u2014are recognized as valid proof of repayment capacity.<\/p>\n\n\n\n
This innovative system helps overcome the obstacles that usually exclude rural populations from the formal banking sector, such as the lack of documented local income or credit history. It relies on the joint action of IFAD and the EU currently in Tajikistan and Kyrgyzstan, which aim to turn remittance flows into savings, entrepreneurship, and climate-resilient rural development.<\/p>\n","protected":false},"excerpt":{"rendered":"
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