International Day Highlighting Vital Role of Remittances in Nepal’s Development

The event highlighted the essential role of remittances in supporting families, rural communities, and Nepal's overall development.

The International Fund for Agricultural Development (IFAD) and the International Organization for Migration (IOM), along with the Resident Coordinator’s Office, celebrated the International Day of Family Remittances (IDFR) in Kathmandu. The event highlighted the essential role of remittances in supporting families, rural communities, and Nepal's overall development.

In 2023, remittances to Nepal were estimated at US$11 billion, accounting for 26.6% of the country’s GDP, surpassing the combined inflow of official development assistance and foreign direct investment. Remittances have shown remarkable resilience during crises, such as the 2015 earthquake and the COVID-19 pandemic.

The celebration gathered key stakeholders from government, international organizations, the private sector, diaspora associations, and returnee migrants. The discussions emphasized enhancing financial inclusion, particularly for women, through tailored financial products and training. Bibiana Vàsquez, Senior Remittances, Diaspora, and Inclusive Finance Specialist at IFAD, highlighted the opportunity to empower women financially by designing specific financial products for remittance senders and receivers, who are often women.

The IDFR theme this year focused on the importance of digital channels in making remittances faster, cheaper, and more accessible. The cost of sending US$200 to Nepal now averages 3.7%, nearing the Sustainable Development Goal (SDG) target of 3%.

Madam Hanaa Singer Hamdy, the United Nations Resident Coordinator in Nepal, pointed out the significant rise in formal financial inclusion in Nepal, from 61% in 2014 to 90% in 2022, driven by digital financial services like digital wallets, now used by almost 19 million people. She called for efforts to address the barriers faced by vulnerable groups such as women, youth, undocumented migrants, and rural populations, aligning with the commitments to the SDGs and the Global Compact for Migration (GCM).

The event also showcased the impact of remittances on financial inclusion, discussing leveraging savings, credit, and investment products to improve the lives of migrant workers and their families. IFAD Country Director for Nepal and Bhutan, Roshan Cooke, noted that remittances make up about 80% of smallholder farm households’ income in Nepal, with only 20% earned from agriculture. He highlighted the SAMRIDDHI project, a US$38 million initiative aimed at enhancing financial inclusion and enterprise development among rural households, migrants, and remittance receivers.

IOM’s efforts in establishing the first Migrant Resource Centre in Nepal were also highlighted. These initiatives support safe, orderly, and regular migration, enhance migrant information management, and assist the government in regional consultative processes. IOM engages the Nepali diaspora and migrants in various migration and development interventions, promoting ethical recruitment, advocating for human rights in business, and building private sector capacities. This aligns with Nepal's leadership in the GCM, which promotes faster, safer, and cheaper remittance transfers and financial inclusion of migrants.

Panel discussions 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 also discussed including remittances sent by international migrants, including Nepali students, in their financial outlook for the country.

Overall, the event highlighted the critical role of remittances in Nepal’s development, emphasizing the need for continued efforts to enhance financial inclusion and support for migrant workers and their families.