How Remittances Can Help Alleviate Poverty

Back in 2015, the UN laid pout plans which sought to put an end to world poverty by 2030. These were optimistic plans which were supported by 17 goals that must be achieved in order to complete this objective. One aspect of those goals was focused on remittances, most importantly reducing the cost of sending money around the world. Whilst there are some challenges around this companies like Ria Money Transfer already have a model which greatly reduces the cost of sending money abroad, and they are leading the charge on that front.

As more nations look to reduce the cost of remittance sending, this is exactly how this process is going to help eradicate world poverty.

Few For The Many

Recent figures show that some 200 million migrant workers, in 40 developed nations around the world, send money to 125 countries and 800 million people. The large majority of these countries are either third-world or developing nations. Whilst remittance sending has slowed a little during the pandemic, the projections for this year suggest that this trend will continue.

Impact on Rural Communities

The International Bank has also released figures which show that some 50% of those who send money to India and other nations around the world, send that money to rural communities. Whilst poverty is not exclusive to rural communities, the UN has indicated that the improvement of these areas is critical to ending poverty.

The Critical 25%

Of the money which is sent back to developing and third world nations, on average 75% of that cash goes directly towards instant needs. The UN cite the remaining 25% as the key to helping people to pull themselves out of poverty. Once the necessary aspects of life are taken care of, the remainder of the money can then be used on enterprise, investment, savings, opportunity, education and many other spends which can help people to progress.

Boosting Economies

It is also important that we look beyond just the people who are receiving money around the world, and to the communities in which they live. This money which is received can seriously bolster local economies and in turn the nation’s economy. With more money coming into the country, it is then spent there and that has a positive ripple effect throughout its communities.

Going to The Needy

There is a long held criticism that a lot of foreign aid or charitable investments fail to reach those in need, or that the sum is a fraction of what was sent when it eventually does get there. This is not the case at all with remittances, as it is individuals who send their money directly to their friends and family. There is nobody else who can take their slice of pie, and this is why remittances are so crucial to supporting the world’s poorest.

This is not going to happen overnight of course, but the volume of remittances which we see on an annual basis is certainly going to be a key factor in helping us to end global poverty.

Author Bio: Tricia Lee is a contributing writer at Sparkwebs, a Digital Marketing

Agency. When she’s not writing, she loves to travel, dance, and read

non-fiction.