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They have provided critical support for those developing markets during the pandemic and will continue their importance after the pandemic is in the rearview mirror, a report by Oxford Economics, commissioned by Western Union, has found.

“We wanted to draw attention to the impact of remittances on developing economies as this is not a well understood issue,” Raj Agrawal, executive vice president and chief financial officer of Western Union, told PYMNTS CEO Karen Webster. “Person-to-person international transfers form by far the largest foreign economic support for developing economies. They have helped smooth COVID-19 pandemic-induced economic shocks, increased the resilience of developing nations throughout 2020, and they present a potential lifeline for recovery in 2021 and beyond.  The report illustrates the crucial role global remittances play in developing economies, often achieving what governments and private direct investment cannot.”

The report, titled “The Remittance Effect: A Lifeline for Developing Economies Through the Pandemic and Into Recovery,” contends that direct payments between individuals and families are more effective at stimulating economic growth and insulating against tough times than are other forms of fund flows that cross international borders.

Photo courtesy of Fiona Graham/WorldRemit.