Every time you send money home, you help change the world.
That may sound hyperbolic, but it’s true. Your payments sent to loved ones — formally known as “remittances” in the financial world — are part of a larger societal lifeline that helps keep communities thriving.
That’s been particularly true during a year that saw the COVID-19 pandemic cause a near 15 percent annual decline in remittances.
In countries like the United States, there are social safety nets that help underprivileged people get much-needed housing and food. Unfortunately, those kinds of programs don’t exist in every country. So when you send your money overseas, you become the safety net for your loved ones (and the world at large).
If that sounds too good to be true, read on to learn about the five ways your remittances make a difference.
1. You Help Triple Foreign Aid Efforts
According to the World Bank, developing economies accepted over half a trillion dollars in remittances in 2019. While that number declined last year (due to the pandemic), it is expected to bounce back as global economies rebound.
Since the 1990s, many countries have received three times more money from remittances than they do from foreign aid. That means loved ones living abroad have been more generous with their support than some of the wealthiest countries in the world.
Your money is an irreplaceable fuel for national economies. In countries like El Salvador and Honduras, remittances account for over 20 percent of their Gross Domestic Product (GDP).
2. You Help Spur Government Aid (& Infrastructure Growth)
While remittances often exceed foreign aid efforts, they can also inspire local governments to provide matching funds.
Many states in Mexico, for example, employ the “Iniciativa Ciudadana 3 por 1.” In this “3-for-1” program, the municipal, state, and federal governments give $3 for every $1 received from migrant workers.
That means that brand new buildings, schools, and other community resources can be built on a mere 33% investment from migrant workers.
3. You Help Reduce Poverty (& Improve Living Conditions)
When it comes to remittances, every dollar counts. Even relatively small amounts of money can make a huge impact on local economies.
Remittances are especially welcome in rural areas, where over 75% of the world’s poor population and “food insecure” live. According to Gilbert F. Houngbo, President of the International Fund for Agricultural Development (IFAD),
“It’s not about the money being sent home. It’s about the impact on people’s lives. The small amounts of $200 or $300 that each migrant sends home make up about 60% of the family’s household income. This makes an enormous difference in their lives and the communities in which they live.”
These remittances lead to healthier lifestyles, more sanitary living conditions, and better healthcare.
According to the United Nations, these rural areas are expected to receive $1 trillion in remittances over the next few years.
4. You Help Fuel the UN’s Sustainable Development Goals
Sustainable Development Goals (SDGs) were established by the United Nations General Assembly in 2015. Each of the 17 SDGs are part of a larger “blueprint to achieve a better and more sustainable future for all by 2030.”
Remittances play a key role in fulfilling many SDGs, including:
- SDG #1: No Poverty
- SDG #2: Zero Hunger
- SDG #3: Good Health and Well-being
- SDG #4: Quality Education
- SDG #6: Clean Water & Sanitation
- SDG #8: Decent Work & Economic Growth
- SDG #10: Reduced Inequality
To help achieve these goals over the next decade, the UN relies on the money you continually send to loved ones.
5. You Help Keep Kids In School
It’s clear that remittances play a major role in global financial aid. But how do they affect local communities?
In El Salvador, remittances encourage students to enroll and stay in school.
According to the Migration Policy Institute, Salvadoran families that receive remittances have a higher enrollment ratio and a lower drop-out rate than families that don’t.
These findings were affirmed in a recent study by the IZA Journal of Development and Migration. This report found that in Ecuador, school enrollment was nearly 6% higher for remittance receiving families.
According to the researchers of the IZA Journal study, remittances “relax the households’ budget constraints, and increase the probability of investing in children’s human capital.”
Sending Money Home With uLink
The COVID-19 pandemic slowed remittances around the world. While there were many contributing factors, a lack of convenience and accessibility precipitated this decline.
Sending and receiving remittances can be cumbersome in many countries, especially since many money transfer services are often completed at in-person locations. During the height of the pandemic, some countries closed cash remittance offices because they weren’t deemed “essential services.”
At uLink, we understand how important it is for you to support your loved ones especially when times get tough. That’s why we make sending and receiving money as convenient as possible.
With the uLink app, you can send money to your family in a few clicks. Plus, your beneficiary receives notifications letting them know exactly when the transfer arrives. In some countries, you can even have the money delivered right to their door.
Plus, after your 1st, 2nd, and 5th transactions, we’ll send you a $10 gift card to use at your favorite retailers. That’s $30 in gift cards after your first five transactions with uLink.
Miles from home — just moments away with uLink.