Remittances to developing countries near US$730 billion – UN

UNITED NATIONS (CMC):

Migrants sent an estimated US$728.6 billion to families in low- and middle-income countries last year, almost double the amount recorded a decade earlier, according to the United Nations’ International Fund for Agricultural Development (IFAD).

The report, titled Sending Money Home 2026: Beyond remittances: From lifeline to resilience – one family at a time, indicated that remittances grew by 94 per cent between 2016 and 2025, far outstripping the 28 per cent rise in the number of migrants from those countries. The disparity suggests that growth has been driven not only by migration, but also by migrants sending larger sums home.

Remittances now exceed foreign direct investment to low- and middle-income countries and are more than four times the value of global official development assistance. Yet IFAD warned that their growing importance also leaves families and economies exposed to developments affecting migrants abroad.

That vulnerability is particularly evident in Latin America and the Caribbean, where the United States remains the main source of remittance flows. The report cautioned that deportations, employment restrictions and weaker labour demand could reduce both the number of people sending money and their capacity to do so.

“Figures right now do not show actually a reduction in remittances,” said Pedro de Vasconcellos, who manages IFAD’s Financing Facility for Remittances, speaking at the daily UN briefing in response to questions about tougher migration policies in the United States and Europe.

He said family needs tend to keep remittance flows resilient, even during periods of crisis.

According to the UN, Central America is among the regions most exposed to shifts in remittance flows. In 2025, remittances were equivalent to 30 per cent of gross domestic product in Honduras, 28 per cent in El Salvador, and 27 per cent in Nicaragua.

A study cited by IFAD found that 61 per cent of surveyed returnees in Guatemala had been the primary income earner in their household, illustrating how involuntary migration can abruptly cut off support for relatives left behind.

Latin America and the Caribbean recorded the fastest remittance growth of any region over the past decade, with inflows rising 132 per cent to US$168.6 billion. Asia and the Pacific remained the largest recipient region, receiving US$384.9 billion, or 53 per cent of the global total.

Africa received US$124.2 billion in 2025, an increase of 86 per cent over the decade. Egypt overtook Nigeria as the continent’s largest recipient.

IMMEDIATE NEEDS

IFAD estimates that roughly three-quarters of remittances are spent on immediate household needs such as food, shelter and utilities. The remaining quarter, worth more than US$180 billion annually, is directed towards healthcare, education, housing, savings and small businesses.

Nearly US$233 billion, about one-third of all remittances sent home in 2025, flowed into rural economies, where access to jobs, financial services and public infrastructure is often limited. Remittance-receiving households also invest an estimated US$22 billion annually in rural agri-food systems.

The report highlighted the role remittances play in helping families withstand climate-related shocks, from replacing lost income to rebuilding after disasters.

De Vasconcellos stressed, however, that these private transfers cannot replace public support mechanisms.

“Technologies really can help. But it’s not enough,” de Vasconcellos said, arguing that families also need reliable and affordable ways to receive and use the money.

More than half of all remittances now begin through digital channels, the report found. However, many transactions still end with recipients collecting cash, and only 35 per cent of services measured in 2025 were fully digital from sender to recipient.

Digital transfers remain significantly cheaper, costing an average of 4.6 per cent, compared with 7.3 per cent for non-digital services.

IFAD is calling for cheaper and more transparent transfer systems, broader access to financial services, and greater opportunities for families to save, insure themselves and invest, enabling them to build long-term resilience.