How Remittances Will Inspire Positive Change Back Across Africa this Holiday Season
WorldRemit breaks down how this common practice of giving contributes to the wellbeing of our communities back home.
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Sending remittances back home this holiday season is important to many immigrants in the US and around the world. In some cultures; people are taught that when you 'succeed', it's important to give back to the people and community that helped you. Sending back money is often perceived as an investment of a special kind — one that not only handles basic family needs but, positively contributes to the social and economic wellbeing of the receiving community. This practice of giving is reflected in the cultural expectations and practice of sending remittances to family and friends across Africa, especially during the holidays.
Money that is sent back home is used for everyday necessities such as food, clothing, housing, education and to fund festive occasions such as Christmas and New Year's celebrations.
Establishing Financial Inclusion and Improving Standard of Living
Financial inclusion is important for sustaining the livelihoods of people back home however this requires access to basic financial services that are affordable and convenient. Remittances lift millions of people and households out of poverty by improving living standards, as well as decreasing the demand for government services. This can help families and individuals on the road to financial independence, savings and investment.
Inclusive finance provides a secure place to keep money, accumulate assets and promotes a sense of dignity regardless of social standing or economic status. All of this can be made possible through the remittances sent by Africans in the diaspora. Credit constraints of unbanked households in poor rural areas can be eased by remittances as it can also facilitate asset accumulation, promote financial literacy and reduce poverty.
Through the WorldRemit platform, senders of remittances can do so digitally (cashless). It's as easy as sending a text message, making the process convenient and affordable to both the sender and the receiver.
There is a connection between remittances and investment in education. Remittance flows have a positive impact on the level of educational investment in children leading to more educated and therefore more stable and empowered families and communities. With the remittances sent back home, the number of children being enrolled in schools increases and the children being forced to stop going to school due to lack of funds or forced into menial labour decreases.
In addition, remittances can help children stay in school even if the funds are not being used specifically for educational investment. When families don't have to worry about making ends meet, children are more likely to finish their education.
Contribution to Employment and Entrepreneurship
One of the major characteristics of developing countries is the high unemployment rates amongst its population. Remittances provide capital to small entrepreneurs and therefore increases entrepreneurship. This is essential because countries that receive a large amount of remittances often have inadequate access to credit for vast portions of the population. While most remittances are used to pay for family consumption, many Africans in the diaspora use part of their earnings to set up businesses in their home country, which in turn provides jobs and employment opportunities.
By providing a solution that would make it easy to send money digitally (cashless), saving time and money in the process, remittances can be sent more conveniently and in larger amounts contributing to reducing unemployment challenges by creating more business and job opportunities.
An Effective Way to Send Money
To positively contribute back home, Africans in the diaspora need to be able to send money conveniently, securely and in the most cost effective way. The answer is to send digitally via the web or an app from their phones-, this not only saves time and money but results in reduced transaction fees. With the cost of remittance transfers drastically reduced by companies like WorldRemit, more money can be sent to improve the lives and livelihood of people back home.