Labour migration and remittances

Helping migrants make the most of their money

Migrants’ remittances are expected to reach US$ 436 billion in 2014 and US$ 540 billion by 2016. Financial education can not only provide useful support to migrants’ families back home but also help migrants in destination countries manage their own budgets.

Feature | 11 December 2014
© Aamir Qureshi / AFP
GENEVA (ILO News) – Moussé Bao is a 35 year-old migrant from Senegal who has been living in France since 2006.

Like most migrant workers, he sends a substantial amount of his monthly salary back to Louga, his hometown in North-Western Senegal, near the coastal city of Saint Louis. Every month, his mother and wife receive about 500 euros through a money transfer service.

“They don’t keep all the money that I send as I am expected not only to support my parents and wife but also my extended family as a whole, including my brothers and sisters,” he explained during a financial education training session in Paris organized by the French Federation of migrant workers’ organisations, FORIM, and supported by the International Labour Organization (ILO).

Bao came to France nine years ago with a university degree in geography, but he quickly developed an interest on financial education and became a trainer. This is now his main professional activity.

Remittance flows to developing countries are constantly growing. According to the World Bank, they are expected to reach US$ 436 billion in 2014 and US$ 540 billion by 2016. Top recipients are India, China, the Philippines, Mexico, Nigeria and Egypt. Many other African countries also depend heavily on remittances.

Hélène Eggert is another trainer working both with African migrants in France and with their families in Cameroon, her home country. Eggert goes back to her hometown of Douala twice a year to explain to migrant families that they should not expect too much from their relatives in Europe.

Financial education is needed for migrant workers but also for their families back home to make the most of the money that is sent."

“Financial education is needed for migrant workers but also for their families back home to make the most of the money that is sent,” she explained.

Eggert – who has been living in France since 1982 – also insisted that even before teaching migrant workers how best to send money back home, there was often a need to train them to manage their own budgets.

“Many new migrant workers do not have the experience of running a budget based on a fixed monthly salary. They are not necessarily familiar with how much money is needed to live in Europe, so when they are under pressure from their families to send money back home, they actually easily get into debt after borrowing too much from credit companies or from other migrant workers,” she explained.

“In many African countries, the person who made it to Europe and managed to find a job is seen as a hero who can save the family from hardship. But they do not always realize that the cost of living in a European country is much higher than in Africa,” added Bao. “When we get closer to the holiday season or – in the case of Senegal – when the time comes for traditional religious celebrations, it is very difficult to resist the pressure from the family back home to send even more money.”

Making informed choices


Most migrants send money home through financial transfer services offering fast delivery but at a cost. The global average cost for sending remittances remains around 9 per cent.

But new means of making transfers are slowly emerging. Bao highlights the possibility to buy food supplies online for families in Senegal, which are then delivered to them. This way, migrants are sure that the money covers basic needs, as the temptation can be high to spend it on non-essential activities.

Eggert also mentioned new micro insurance coverage that makes it possible to provide social protection benefits to family members instead of sending them cash. However, these schemes are only emerging.

Financial education can also help migrant workers who are planning to return home and perhaps start their own business.

“Migrant workers must be able to make informed choices about when and when not to contract debt, how best to save or what to look out for in the small print of an insurance contract,” explained Séverine Deboos from the ILO Social Finance programme.

Remittances can be essential in transforming the benefits of labour migration into development."

The ILO has developed financial education training tools like the ones used by Eggert and Bao, as well as programmes to develop the knowledge and skills that are required for responsible budgeting, including spending, saving, borrowing and investing.

Training has been provided in countries like Benin, Burkina Faso, Cambodia, Ethiopia, Indonesia, Kenya, Mali, Mauritania, Moldova, Morocco, Myanmar, the Philippines and Senegal. Training sessions were also organized in close cooperation with local authorities, social partners and migrant associations in Singapore, Malaysia, Thailand, France, Spain and Italy.

The ILO has carried out research on migrant remittances and microfinancing, as well as feasibility studies on using a portion of migrant workers‘ remittances to develop health micro insurance products in origin countries such as Mali, Senegal and Comoros.

“Remittances are the expression of migrant workers’ solidarity with their families and communities. As a private and autonomous financial source that crosses borders, remittances can also be essential in transforming the benefits of labour migration into development,” said Samia Kazi-Aoul, from the ILO Labour Migration Branch.

“Equality of treatment, non-discrimination and access to decent work are vital to improving migrant workers’ incomes and their capacity to contribute to development,” she concluded.