How IFAD is maximizing the economic impact of remittances

Every year, more than 200 million migrant workers and diaspora members send remittances home, supporting an estimated 800 million family members. Much of this money reaches rural communities, where remittances provide a financial lifeline and help to ensure resilience in the face of shocks.

With the right investment, these capital flows can become a reliable driver of economic growth. In the past decade, remittances to low- and middle-income countries totalled more than US$5 trillion globally and rose steadily despite the pandemic, political instability and other global disruptions.

As the host of the Financing Facility for Remittances (FFR) and lead organization on the International Day of Family Remittances, IFAD positions remittances at the centre of its mandate. IFAD invests in rural communities’ capacity to leverage this capital, financing projects that drive innovation and strengthen digital infrastructure.

As remittances become a greater priority for Member States and donors, IFAD is working to maximize and strengthen this crucial lever for rural transformation. Partners such as the French G7 Presidency, an official partner on the 2026 International Day of Family Remittances, are helping to champion the role of remittances in driving rural entrepreneurship, employment and resilience.

Driving innovation in remittances

Digital infrastructure is key to maximizing the impact of remittances, reducing costs, increasing security, and enabling recipients to access funds without long and costly travel. Many of IFAD’s investments focus on innovating within this space; beyond government partnerships, IFAD is working with the private sector to strengthen remittance markets. 

Through the PRIME Arica programme, funded by the European Union, IFAD partnered with 18 private sector institutions to expand formal financial access and digitalization of remittances for nearly 1.5 million people across seven African countries. Over five years, private sector partners invested over 40 per cent of the total project investment, signifying a strong commitment to scaling innovative solutions. 
 
Building on these experiences, IFAD and the Italian Agency for Development Cooperation (AICS) launched the Diaspora RemitInvest programme, to maximize remittances for rural development in Senegal and Mali. 

In Senegal, remittances are a major contributor to the national economy, equating to around 10 per cent of GDP. In Mali, remittances are equivalent to over five per cent of GDP. Meanwhile, Italy – home to Senegalese and Malian diaspora communities totalling 150,000 people – is a key remittance corridor, with flows to Senegal estimated at around EUR 310 million in 2025.  

Through blended finance, Diaspora RemitInvest aims to channel diaspora resources more effectively. By integrating digital remittances with complementary financial services, selected projects will help rural families save, invest, grow businesses and better manage risks. 

The IFAD-EU initiative ResilientRemit is further managing risks by connecting remittances and diaspora investments to opportunities that support climate resilience. The programme is being implemented in Honduras, Senegal and Pakistan, and helps remittance-receiving households access financial services to repair homes in the aftermath of climate shocks, invest in renewable energy, diversify incomes and develop resilient agricultural practices. 

trengthening financial inclusion

Access to financial services is only the first step. IFAD's investments also ensure that remittances translate into long-term financial inclusion. Because these funds are not generated by small-scale producers’ own businesses, they often boost immediate income without automatically improving a household's broader financial standing or credit access. 

In Uzbekistan, IFAD and the European Union are partnering with Hamkorbank under the REMIT-PRIME programme to change this. A landmark initiative is targeting nearly 4,000 remittance-receiving households and returning migrants through a new remittance-based credit scoring model. Under this system, funds sent from family members working abroad – as well as returnee savings – are recognized as valid proof of repayment capacity. 

This innovative scoring system aims to overcome traditional barriers that keep rural populations excluded from formal banking, such as a lack of documented local income or formal credit history. It builds on ongoing IFAD–EU efforts in Tajikistan and Kyrgyzstan that are committed to transforming remittance flows into savings, entrepreneurship and climate-resilient rural development. 

Learn about the International Day of Family Remittances.

See https://www.ifad.org/en/w/explainers/how-ifad-is-maximizing-the-economic-impact-of-remittances