The pandemic’s effect on the flow of global remittances sent by migrants back home to low- and middle-income countries (LMICs) is projected to be one of sharp decline – a fall by about one fifth this year. The estimated 20 per cent slump represents US$ 109 billion in 2020. The hardship of COVID-19 felt by migrants in a loss of wages and employment – often without government safety nets in the countries that host them – is a large part of this crisis in remittances.
The decline also results from a host of issues caused by the coronavirus for the services that migrants use to send money home – including the restrictions placed on remittance services providers (RSPs) and their agents.
The decline to the flow of remittances represents the loss of a crucial financing lifeline for many vulnerable households. And the rapidly intensifying economic effects of COVID-19 have a severe impact in migrants’ countries of origin, but also the local economies of their host communities.
The United Nations Capital Development Fund (UNCDF) collaborated with the International Association of Money Transfer Networks (IAMTN) to gather insights from RSPs on the specific nature of the pandemic’s impact on migrants and remittances. As well as highlighting the challenges faced by migrants and RSPs, the providers’ responses also reveal some of the initiatives they are undertaking to address these. Finally, the insights also give reflections on the measures that can be put in place by policymakers and regulators.
Continue Reading: UNCDF Publication