Top ten remittance markets in the world

Top 10 remittance markets in the world

Whenever you send money home, you’re supporting more than just your loved ones. Your money also helps combat social issues like gender inequality and illiteracy. For many countries, remittances are also a huge boost to the economy, helping reduce hardships like poverty and unemployment. In fact, remittances now exceed foreign aid and investments in many developing nations. Of the $700 billion that was sent back home last year, over half went to just ten countries. 

Discover which countries they were and where that money came from.

1. India – 83 billion dollars

The largest source of remittances to India (30.8%) are West Asian countries like the United Arab Emirates. Next up is North America (29.4 per cent) and Europe (19.5 per cent). The Indian state of Tamil Nadu has the most diverse mix of remittance sources due to extended Tamil communities overseas. The largest remittances to Tamil Nadu originate from Malaysia, Singapore and the United States (US)

2. China – 60 billion dollars

Surprisingly, the world’s most populous country doesn’t receive the most in remittances. That’s because India boasts a larger diaspora population. Nonetheless, China gets most of its money from anglophone countries like the US, Australia and Canada. In addition, the Chinese economy receives a large chunk of remittances from other Asian nations such as Japan and South Korea.  

3. Mexico – 43 billion dollars

Although Mexico also shares a border with Belize and Guatemala, it’s the border with America that’s most crucial to Mexico’s economy. That’s because most of the country’s remittances are sent by family members living in the US. So, in addition to supporting loved ones, remittances have helped Mexico become Latin America’s second-largest economy.

4. The Philippines – 35 billion dollars

Filipino migrants who send money home are regarded as modern-day heroes. Like Filipino National Heroes, remittances have “contributed to the quality of life and destiny of the nation”. If you’re looking for evidence, look no further than the coronavirus outbreak. Contrary to popular belief, overseas workers often send more money home during times of economic hardship. While the World Bank predicted a 20 per cent dip in remittances in 2020, they only fell by 1.6 per cent. Remittances to the Philippines only fell by 0.8 per cent. Interestingly, of the tens of billions sent to the Philippines every year, nearly half comes from the US.  

5. Egypt – 30 billion dollars

Remittances to many countries remained surprisingly stable in 2020 – but Egypt bucked the trend. That’s because remittances to the country increased by a record-setting 11 per cent. One explanation could be expats living in the Gulf Cooperation Council (GCC) region. Comprising countries like Saudi Arabia and Kuwait, the GCC is the primary source of remittances to Egypt. Home to several million Egyptians,  sending remittances from the GCC is significantly cheaper than from the Western world. 

6. Pakistan – 26 billion dollars

Since the start of the pandemic, remittance payments to Pakistan have continued rising. Proactive measures by the government, like increased interest rates on savings, have encouraged expats to send more home. According to the State Bank of Pakistan, the closure of international borders combined with Eid al-Fitr contributions have led to record remittance numbers. They’ve been so impressive that even prime minister Imran Khan tweeted his thanks to the Pakistani diaspora.

7. France – 25 billion dollars

France is a major remittance-sending country, especially to Africa. However, it’s also a big recipient of money from overseas. But how come? Let’s have a closer look. London is often spoken of as “the sixth biggest city in France”. That might seem nonsensical, but it makes sense when you consider that more French people (around 350,000) live in England’s capital than in Nice. Indeed, many French people leave their home country for pastures new. That includes other EU countries, the UK and North America. Perhaps in anticipation of returning to France or helping loved ones, expats continue sending remittances home.  

8. Bangladesh – 22 billion dollars

Only India, Mexico, China and Russia have more citizens working overseas than Bangladesh. Remittances from over 10 million expats and money from the garment industry are the key sources of inbound capital to Bangladesh. However, unlike money from exports, remittances are more evenly circulated across the country. Whereas most business profits get taxed and then reinvested, remittances are usually spent straight away. 

9. Germany – 18 billion dollars

Despite being a popular destination for immigration, about 4-5 million Germans (roughly the population of Berlin) live outside Germany. Consequently, it’s one of the largest sources of diaspora in the Organisation for Economic Cooperation (OECD). Germans predominantly live in the US, France, the UK, the Netherlands, Switzerland, Italy and Spain. But why? Primarily, most emigrants are well-educated and earn more abroad. A study by the University of Duisburg revealed that Germans overseas make on average €12,000 more than they do back home. While around 180,000 Germans emigrate every year, another 130,000 return. This annual repatriation could explain Germany’s high remittance inflows.

10. Nigeria – 17 billion dollars

Nigeria accounts for over a third of remittances to Sub-Saharan Africa. And since many transfers to Nigeria occur through informal channels, the actual amount is probably higher. While most money originates from Nigerians in the UK and the US, neighbouring Cameroon is an often overlooked source. According to analysts, 70 per cent of remittances are spent on consumables such as food and energy. The rest goes towards investments like housing and education.

*Figures taken from World Bank 2020 data and have been rounded up to the nearest billion.