How do remittances empower women?


International Women’s Day, celebrated on 8th March every year, is a symbolic day for the empowerment of women globally. This year, this special occasion will have a particular focus. The aim of ‘Women in leadership: Achieving an equal future in a COVID-19 world’ is to ensure that the COVID-19 recovery takes place in an environment which recognises and enhances women’s rights and leadership.


Remittances play a key role in providing women around the world with new opportunities. In fact, almost half of the 272 million international migrants are women, and they also represent the largest number of recipients of remittances (Source: World Bank data). For example, in Guatemala, 63% of remittance recipients are women, while this number increases to 70% in Colombia (Source).


This additional source of revenue for a female recipient can improve her position in the household, and even in the overall community. Moreover, research shows that women tend to spend more remitted money on the nutritional, educational and healthcare needs of household members, especially children, when compared to men. We can therefore expect that received remittances will also have a positive impact on global educational attainment as well as health outcomes, supporting the realisation of the UN’s Sustainable Development Goals (SDGs) as well as the global recovery process from the COVID-19 pandemic.


It is important to note that the gender gap in financial inclusion is unfortunately still far from being closed. According to the Global Findex survey, the financial inclusion gender gap remained at 7% globally between 2011 and 2017, and 9% for emerging economies. Women make up 55% of the world’s unbanked population, i.e. those with no access to banking products (Source). For this reason, women are more likely (when compared to men) to send and receive remittances through remittance services providers (RSPs) rather than banks, where women still face barriers to access services and opening an account (Source). The service provided by RSPs is therefore crucial since it is more easily accessible to women. As an example, mobile money seems to be a product that increases women’s financial inclusion (Source). In fact, mobile money often allows the transfer of money more cheaply, and it is more suitable for sending small amounts. Receiving money digitally can also allow women to access a broader range of digital financial services, such as e-commerce.


As an example, M-Pesa is well-known for contributing to reducing the gender gap in financial inclusion. The company shared with us that, in Ghana, 76% of mobile money users are female. However, in many other countries in which M-Pesa operates men are still much more likely to use those services, and they continue to occupy most of the business space. Some research has shown that women who use M-Pesa in Kenya are more likely to have control over their own money rather than through their husbands. This gives those women greater power over financial decision-making, including the ability to save money rather than spend it immediately, thereby providing insurance in case of emergency (Source). The use of mobile money by a greater number of women would allow a larger proportion of them to obtain market access, and therefore to increase their income, and consequently to become more independent.


Today, since it is clear that remittances have large benefits for the emancipation of women, it is important to promote their access to money transfer services. This need is further enhanced by the fact that women have been particularly affected by the COVID-19 crisis. As research on remittance patterns by gender is very scarce, the collection of gender-separated data should be encouraged in order to support the development of the policies required to increase women’s use of remittances. Additionally, information campaigns could help ensure that women have information on which services to use for sending and receiving cheap and secure remittances.


Improving remittance services for women can be a tool for their economic empowerment. Furthermore, it will also generate a virtuous cycle of enhanced financial, educational and health outcomes, which will undoubtedly support the long-term recovery from COVID-19 and lead to global empowerment of women in society.


On this 8th March, we wholeheartedly stress the importance of celebrating all women. We encourage them to continue standing up for their rights and to resolutely express their leadership. Now more than ever, it is necessary for all genders to work together to make the world a better place.