For many households, the money sent back from an overseas family member helps make ends meet, is a lifeline in a crisis, drives social mobility, and even supports the broader community.

The determination of migrants to help their families - sending up to US$300 on average every one to two months - means that remittances are dependable too.

About 800 million family members who remain at home benefit from the remittances sent by 287 million migrants. The flow of remittances to low and middle-income countries reached US$647 billion in 2022, according to the World Bank.

In countries like Ukraine, remittances represent over three times official development assistance (ODA) and surpass foreign direct investment (FDI).

As the cost-of-living crisis continues to grip communities, these remittances are more vital than ever. Around 75 percent of remittances are used for immediate needs.

“My family in Guinea-Bissau relies completely on my money transfers for daily sustenance,” said a migrant taking part in UNDP 2023 research on better engaging diaspora members in government-led development policies.

The rest - more than $100 billion - covers long-term goals. They enable communities to fight poverty and improve health and education, to invest in entrepreneurship, while empowering women and young people.

"To finance my business, I reached out to relatives abroad, borrowed around 55,000 euros, and invested them in the development of the guesthouse. I have already managed to return 60 percent of the amount,” said Victor Ciolacu, owner of the Honey Mansion guesthouse in Moldova. 

In countries affected by conflict, disasters and the impact of the climate emergency, remittances are frequently the first form of help to arrive.

For fragile and conflict-affected countries, the flow of remittances of $58 billion are triple FDI and similar to $62 billion of ODA.

Migrants and their families are key partners in delivering the Global Compact for Migration and the Sustainable Development Goals (SDGs). A projected $8.5 trillion in remittances will be sent to developing countries between 2015 and 2030. There are more than 80 countries in the world that rely on remittances for more than 3 percent of their GDP.

Some governments have taken actions to mobilize their diasporas to become partners in national and local development, and have sought to provide opportunities for more productive uses of remittances to enhance development impact.

The African Union Commission (AUC), the International Organization for Migration (IOM) and UNDP have launched a joint framework programme to maximize the socio-economic development potential of diasporas. In Mexico, UNDP is working with Tec de Monterrey and the British Embassy to research financial habits and the distribution, control and spending of remittances within households.

Diaspora members and communities of origin have contributed to local initiatives and projects in Moldova, benefiting over 500,000 people since 2015. Since UNDP handed the project to the government last year, 160 Hometown Associations have been set up and deployed nearly 200 projects with a total budget of $9 million. As an organic continuity, an Alliance of Hometown Associations was created.

The volume of remittances could increase if there were safer and more regular pathways for migrants and the cost of sending remittances were reduced. An analysis shows that a 10 percent increase in per capita remittances leads to a 3.5 percent decline in the share of poor people in the country’s population.

The average cost of sending $200 is above 6 percent, twice the SDG target of 3 percent. The African remittance market remains one of the costliest, with the most expensive corridors registering 25 percent at times last year. UNDP is helping 12 African countries reduce transfer costs that will boost incentives for sending money home, and encourage the use of formal channels.

Technology holds immense potential to drive down these costs. Yet, less than 1 percent of remittances transactions globally are made through digital channels. UNDP is working with migrants from Kyrgyzstan on how to harness crowd funding technology to resource development projects.