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Using remittances

Workers from the Asia-Pacific region are now sending home more than $60 billion in remittances. These are valuable not just for the migrants and their families but also for the local economy. Countries need to ensure, however, that migrants can make best use of these funds.

Most migrants from Asian countries are traveling on a temporary basis. They usually live frugally to save as much as possible, either to take back when they return or to send to their family at home. As a result, Asian countries are among the higher beneficiaries of remittances. In 2006 the region’s labour origin countries in total received over $60 billion. Some of the largest recipients included India ($30 billion), the Philippines ($12 billion), and Pakistan ($4 billion).

The poorest migrants and their families will use these funds for consumption — or for investment in housing or in the education of children. But regardless of what the funds are used for they usually have a positive effect on the national economy, resulting in higher levels of savings and investment.

Governments that want to encourage remittances will need to make it easy and cheap for workers to transfer funds. They will also want to encourage them to use the funds as productively as possible — for business creation, for example, or for community development projects.

What the ILO can offer

Microcredit in India
ILO Microcredit programme in India

Over the last few years the ILO's Social Finance Programme has undertaken research on the potential of linking remittances to microcredit — to foster a more productive use of resources.

Through action-oriented research in a number of countries, including Bangladesh and Nepal, the Social Finance Programme aims to map current remittance patterns between and within countries and to assess the availability of suitable transfer services and their transaction costs.


Online publications

  1. Migration and household poverty in the Philippines
    Overseas Filipino Workers and their Impact on Household Poverty.
    Geoffrey Ducanes and Manolo Abella. ILO/EU WP05 [pfd - 0.6 MB]
  2. Migrant Worker Remittances and Micro-Finance in Bangladesh [pdf 0.3 Mb]
  3. Savings and Credit Associations and Remittances: The case of Far West Nepalese Labour Migrants in Delhi, India [pdf - 0.3 Mb]

Useful websites

  1. ILO Social Finance Programme
  2. Inter-agency task force on remittances


Last update: May 3, 2009 ^ top