The commitment of diaspora through remittances and investment: contributing to the Global Compact for Migration and achieving the SDGs

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GFRID 2018 – The commitment of diaspora through remittances and investment. Part 1
GFRID 2018 – The commitment of diaspora through remittances and investment. Part 2
GFRID 2018 – The commitment of diaspora through remittances and investment. Part 3
GFRID 2018 – The commitment of diaspora through remittances and investment. Part 4


Jill Helke, Director, International Cooperation and Partnerships, International Organization for Migration (IOM)

B. Lindsay Lowell, Director of Policy Studies, Georgetown University

Pedro De Vasconcelos, Senior Technical Advisor and Manager of the Financing Facility for Remittances, IFAD

Shahadat Khan, Academic and researcher, RMIT University in Melbourne, Global Coordinator, Migrant Family Motivation Initiative (MFMI)


Bela Hovy, Chief, Migration Section, Population Division, UN Department for Economic and Social Affairs (UN-DESA)

Diaspora have proven their commitment to their countries of origin through the money they send in support of their families back home, the investment of hard-earned savings, and the entrepreneurial activities undertaken by returnees. The total dollar amount of these remittances is three times that of official development assistance (ODA), with 75% supporting people directly and the rest channeled into savings and investment. And yet, despite these numbers, most remittance money is inefficiently directed and unable to be leveraged into more productive endeavors.

FSPs are beginning to address this problem by encouraging people to invest more directly, through diaspora bonds and other investment vehicles aimed at migrants. Overall, the level of commitment by FSPs and investment is still inadequate, mainly because of the financial sector’s lack of understanding of their target market.

The migrant community is typically understood as a homogeneous group, when in fact, the market is quite segmented. There are significant differences between migrant skills and income levels; and FSPs should direct their marketing and products accordingly. For example, lower skilled (and thus lower income) migrants may need to be brought into the regulated financial sector by linking remittances to savings services. On the other hand, higher skilled/higher earners are better positioned to direct monies beyond their immediate family, and thus need to be informed about investment products.

Ultimately, both public and private sectors need better data. Although governments often have good quantitative data, they are often “locked away” in departmental silos at no one’s benefit. Instead, such data should be shared and made public among departments, and accessible to the private sector. In particular, governments could publish data on remittances (from central banks) and migration flows (from labor departments), having everyone benefiting from disaggregating and freeing up data.

And while quantitative data is absolutely necessary, what is lacking is good qualitative data. The public and private sectors need to place more emphasis on talking to actual migrants, performing in-depth interviews to get to the heart of the migrant experience and thus better understand it.


Without a clear picture of the migrant experience, neither the public nor the private sectors can act appropriately. The public sector needs to understand the migrant needs, or else they cannot implement good policies. Even well-meaning policies can have unintended consequences when not carefully implemented. For example, AML/CFT regulations may restrict fraud and terrorism, but they can also cut out good actors from the financial sector.

While increasing financial access is a goal, what businesses want is business opportunity. But without a better understanding of the migrant market, business will continue to create generic products that fail to meet the migrant needs.


Public and private sectors need good data in order to create good policy and good products.

Good data consists of both quantitative (e.g., number of migrants, amount of remittances) and qualitative (immigrant interviews) information.

Although such data are currently collected, authorities should take one step further to make it publicly available;

Private entities need to share lessons learned and best practices.

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