How to Overcome the Challenges of International Remittances amidst Covid-19?

International remittance is regarded as one of the most important forms of financial inflows for developing and under-developed countries. Cash coming in from developed countries helps poverty-stricken and underprivileged families to sustain. Cross-border payments in the pre-COVID era looked quite promising with World Bank predicting them to reach $574 billion in 2020 and $597 billion in 2021. However, the Coronavirus outbreak drastically changed the course of the industry with the financial institution now forecasting a sharp decline of 20% in the global remittances this year.

The remittances flow to low and middle-income countries (LMIC) that stood strong at $554 billion in 2019, is likely to drop to $445 billion in 2020. The major reason for the projected decline is the loss of employment and wages of migrants in host countries due to COVID-induced lockdowns. About 75% of the world’s migrants live in countries which have reported close to three-quarters of the total COVID-19 cases and about 90% of the remittances are sent by migrants from these countries, says the data from World Bank.