Mechanisms for Diaspora Finance

Location Global

This report explores determinants for how to improve the investments of women and men migrants in their countries of origin, ranging from putting in place favourable policy and regulatory frameworks, improved technology that reduce the cost and complexity of sending remittances, to aspects such as consumer protection and capacity building. It also examines a range of financial products that countries can consider for their diaspora to invest in, including micro savings products, endowment savings accounts, savings and credit cooperative societies, pension schemes, insurance policies, mortgages and collective investment schemes or mutual funds.

The number of international migrants worldwide has grown from 173 million in 2000, to 220 million in 2010, and to a current estimate of 272 million people, or 3.5 percent of the world’s population who now live outside their country of origin in 2020. Approximately 48 percent of them are women.

In 2020, officially recorded remittance flows to low- and middle-income countries (LMICs) reached US$540 billion, which is 1.6 percent below the US$548 billion recorded in 2019. The decline is attributed to the COVID-19 pandemic. For these countries, remittances received not only complement official development assistance, but also serve as a reliable source of income for household consumption, emergency needs and investments, and sometimes even as the main source of income.