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Objective 20 in the Global Compact for Migration

Promote faster, safer and cheaper transfers of remittances and foster financial inclusion

The Global Compact for Safe, Orderly and Regular Migration (GCM) is based on 23 objectives. This page provides resources for objective 20 (Promote faster, safer and cheaper transfers of remittances and foster financial inclusion):

“36. We commit to promote faster, safer and cheaper remittances by further developing existing conducive policy and regulatory environments that enable competition, regulation and 28 innovation on the remittance market and by providing gender-responsive programmes and instruments that enhance the financial inclusion of migrants and their families. We further commit to optimize the transformative impact of remittances on the well-being of migrant workers and their families, as well as on sustainable development of countries, while respecting that remittances constitute an important source of private capital, and cannot be equated to other international financial flows, such as foreign direct investment, official development assistance, or other public sources of financing for development.

 

To realize this commitment, we will draw from the following actions:

(a) Develop a roadmap to reduce the transaction costs of migrant remittances to less than 3 per cent and eliminate remittance corridors with costs higher than 5 per cent by 2030 in line with target 10.c of the 2030 Agenda for Sustainable Development;

(b) Promote and support the United Nations International Day of Family Remittances and the IFAD Global Forum on Remittances, Investment and Development as an important platform to build and strengthen partnerships for innovative solutions on cheaper, faster and safer transfer of remittances with all relevant stakeholders;

(c) Harmonize remittance market regulations and increase the interoperability of remittance infrastructure along corridors by ensuring that measures to combat illicit financial flows and money laundering do not impede migrant remittances through undue, excessive or discriminatory policies;

(d) Establish conducive policy and regulatory frameworks that promote a competitive and innovative remittance market, remove unwarranted obstacles to non-bank remittance service providers in accessing payment system infrastructure, apply tax exemptions or incentives to remittance transfers, promote market access to diverse service providers, incentivize the private sector to expand remittance services, and enhance the security and predictability of low-value transactions by bearing in mind de-risking concerns, and developing a methodology to distinguish remittances from illicit flows, in consultation with remittance service providers and financial regulators;

(e) Develop innovative technological solutions for remittance transfer, such as mobile payments, digital tools or e-banking, to reduce costs, improve speed, enhance security, increase transfer through regular channels and open up gender-responsive distribution channels to underserved populations, including for persons in rural areas, persons with low levels of literacy, and persons with disabilities;

(f) Provide accessible information on remittance transfer costs by provider and channel, such as comparison websites, in order to increase the transparency and competition on the remittance transfer market, and promote financial literacy and inclusion of migrants and their families through education and training;

(g) Develop programmes and instruments to promote investments from remittance senders in local development and entrepreneurship in countries of origin, such as through matchinggrant mechanisms, municipal bonds and partnerships with hometown associations, in order to enhance the transformative potential of remittances beyond the individual households of migrant workers at skills levels;

(h) Enable migrant women to access financial literacy training and formal remittance transfer systems, as well as to open a bank account, own and manage financial assets, investments and business as means to address gender inequalities and foster their active participation in the economy;

(i) Provide access to and develop banking solutions and financial instruments for migrants, including low-income and female-headed households, such as bank accounts that permit 29 direct deposits by employers, savings accounts, loans and credits in cooperation with the banking sector.”

(GCM, 2018, para. 36)

Although the significance of social remittances (being ideas, behaviours, knowledge, political values, among others) is well acknowledged in the literature, Objective 18 focuses on financial remittances, which are usually understood as the money that migrants send back to families and friends in their communities of origin. Albeit being private funds and thus not to replace public development assistance, these remittances can be a crucial aspect of migrants’ financial contribution to their countries of origin and a vital source of income for millions of individuals and families across the world, which could even be considered as a motive for migration. They represent a lifeline in many countries in the global South, allowing migrants’ families to fight poverty and improve their access to nutrition, health, education, housing, water and sanitation, thus in short, to help achieving the Sustainable Development Goals. Steady flows of remittances also promote the financial inclusion of households, as the productive use of these funds positively impact local communities through savings, investments and job creation. At the same time a number of agents and networks are involved in the transfer of financial remittances.

While the flow of remittances has constantly and considerably grown over the years, and this trend was initially expected to increase, at the beginning of 2020 the global Covid-19 pandemic has impacted these flows. Unlike previous crises, the economic impact and scale of current events is simultaneously affecting international and domestic migrants who send remittances from high-income areas and their families living in developing countries, with dramatic consequences in terms of amount of remittances sent in 2020 (for more information see here). and ensuing adverse impact on the wellbeing and resilience of the households at the receiving end.

Remittances in the text of the Global Compact

Objective 20 is also very relevant for the following sections of the GCM:

  • Objective 1 (para. 17)
  • Objective 3 (para. 19)
  • Objective 19 (para. 35)
  • Objective 23 (para. 39)

The Global Compact for Migration (GCM) report is available in AR, ZH, EN, FR, RU, ES.

Documents

The UN Migration Network’s policy guidance, developed under the leadership of IFAD with support from IOM, OHCHR, UNICEF, UN Women, and the World Bank, highlights measures needed for an effective response to reduced remittances flows.
Date of publication:
13 December 2020
Information Type:
Today, post offices deliver more money than mail.
Date of publication:
30 June 2020
Information Type:

Events

The eGFRID series are structured around the concept of communities of practices and delivered through specific webinars.
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We are pleased to invite you to join a training session on how to use the Migration Network Hub.
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Projects

This EU-funded € 15 million programme aims to address the impact of remittances to development through innovations, partnerships and scalable products that promote cheap and fast remittance transfers.
IFAD partnered with the Malaysian Mobile Money Provider, Valyou, to open digital remittances channels to Pakistan and Bangladesh.

Training and guidance

Cover photo: Jack Gotch/IOM. Hoedspruit, South Africa. Description: Garry, a migrant worker from Zimbabwe, stands in front of agricultural machinery on a farm in South Africa.
This Toolkit has been developed by IOM in collaboration with FAO with the support of the European Union under the Mainstreaming Migration into International Cooperation and Development (MMICD) project.
Date of publication:
01 February 2022
Source:
Presentation on the Guidance Note prepared by TW4 on BLMAs at the technical meeting of the Champions on 3rd November 2021.

Videos

Did you know that over one billion people on earth either send or receive remittances and that 50% of the half a trillion dollars sent home by migrant workers every year goes to rural places?
IFAD piloted a new microinsurance distribution channel linked to remittance services, promoting partnerships between Money Transfer Operators (MTOs) and insurance companies who wish to develop customised products for migrant workers and their families back home.

About the Migration Network Hub

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The Hub is a virtual “meeting space” where governments, stakeholders and experts can access and share migration-related information and services. It provides curated content, analysis and information on a variety of topics.

The Hub aims to support UN Member States in the implementation, follow-up and review of the Global Compact for Migration by serving as a repository of existing evidence, practices and initiatives, and facilitating access to knowledge sharing via online discussions, an expert database and demand-driven, tailor-made solutions (launching in 2021).

What content is displayed in the Hub?

The Hub aims to help you find information on migration, ranging from policy briefs and journal articles, existing portals and platforms and what they offer, to infographics and videos. The different types of resources submitted by users undergo peer review by a panel of experts from within the UN and beyond, before being approved for inclusion in the Hub. To provide guidance to users based on findings of the needs assessment, the content is ordered so that more comprehensive and global resources are shown before more specific and regional ones. Know a great resource? Please submit using the links above and your suggestion will be reviewed. Please see the draft criteria for existing practices here.

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