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20 - Remittances

GCM Objectives
20 - Remittances

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.

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*References to Kosovo shall be understood to be in the context of United Nations Security Council resolution 1244 (1999).