United Nations agencies the International Fund for Agricultural Development (IFAD) and the International Organization for Migration (IOM) celebrated the vital contributions of migrants – in the shape of the remittances they send home – in supporting Nepali families, rural communities, and the country's overall development at an event in Kathmandu today.

The event, held to celebrate the International Day of Family Remittances, brought together key stakeholders from government, international organizations, and the private sector.

Remittances are critical in Nepal, estimated at US$11 billion in 2023, accounting for 26.6 per cent of the country’s GDP – more than the combined inflow of official development assistance and foreign direct investment to Nepal. Moreover, these flows have proved to be resilient through crises, including the 2015 earthquake and the COVID-19 pandemic.

“Remittances are often the first financial service used by migrants and their families offered by regulated providers. This is an opportunity to financially include them. Also, we know that in many cases, remittance senders or receivers are women – this again is an opportunity to design specific financial products and training that fit women’s needs for furthering women’s financial inclusion and economic empowerment,” said Pedrode Vasconcelos, Programme Manager, Financing Facility for Remittances (FFR) and IFAD’s Senior Technical Specialist - Coordinator, FFR.

The year’s theme for the international day emphasizes the importance of digital channels in making remittances faster, cheaper, and more accessible. Remittance costs to Nepal have been, and continue to be, low. The cost of sending US$200 as a remittance to Nepal now averages 3.7 per cent (World Bank), closing in on the Sustainable Development Goal for remittance costs to average 3 per cent. Similarly, Nepal has made significant advancements in financial inclusion and in offering formal channels for remittance transfers.

“Formal financial inclusion in Nepal has risen significantly, from 61 per cent in 2014 to 90 per cent in 2022, driven by the adoption of digital financial services like digital wallets, now used by almost 19 million people. Yet vulnerable groups such as women, youth, undocumented migrants and rural populations are often left behind. We must come together to address these barriers and meet our commitments to both the Sustainable Development Goals and the Global Compact for Migration,” said Hanaa Singer, United Nations Resident Coordinator in Nepal.

The event featured comprehensive discussions on the impact of remittances on financial inclusion, with a focus on leveraging savings, credit, and investment products to improve the lives of migrant workers and their families. It also showcased preliminary results from IFAD and IOM, highlighting collaborative efforts to digitize remittances, reduce costs, and achieve financial inclusion.

Roshan Cooke, IFAD Country Director for Nepal and Bhutan, noted that,“In Nepal it is estimated that remittances make up about 80 per cent of smallholder farm households income while only 20 per centof income is earned from agriculture itself”. He announced the successful completion of the US$50 million, seven-year SAMRIDDHI project with Nepal's Ministry of Industry, Commerce, and Supplies, whichbenefitedrural households, migrants, and remittance receivers through financial inclusion and enterprise development.

IOM, which supports safe, orderly, and regular migration in Nepal, established its first Migrant Resource Centre, enhanced the migrant information management system and assisted the government in leading regional consultative processes. In collaboration with government and society, IOM engages Nepali diaspora and migrants through migration schools, migrant worker reintegration, and counter-trafficking efforts, aligning with Nepal's championing of the Global Compact for Migration (GCM).

“Nepal stands as a champion country of the GCM, which has a specific objective that focuseson promoting faster, safer, and cheaper transfer of remittances and fostering financial inclusion of migrants. IOM remains committed to supporting the implementation of the GCM actionable commitments, including efforts in promoting ethical recruitment, advocating for human rights in business, and building the capacities of the private sector to achieve these goals,” said Helene Fors, IOM Chief of Mission, Nepal.

Panel discussions throughout the event underscored the resilience that remittances help build among rural people. Migrants support their families in achieving the SDGs, and returnees use their accumulated savings and knowledge to invest back home, generating employment and fostering local development. The Central Bank of Nepal discussed the inclusion of remittances sent by international migrants, including Nepali students, in their financial strategies.

Highlights from the World Migration Report 2024 were presented, focusing on migration trends and the development impact of remittances.