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June 27th, 2017

The impact of remittances in Lesotho, Malawi and Zimbabwe

Published by FinMark Trust,

This report (PDF) published by FinMark Trust provides an analysis on the impact of cross-border remittances on the lives of households in Malawi, Lesotho and Zimbabwe, and the role that access to financial services plays in shaping that impact. Remittances play a complex role in poverty alleviation. They contribute to improving food security. When the origin household practices farming, remittances may do more to support food security by paying for seasonal agricultural inputs, and helping recipients to grow their own food. This dynamic is one of the reasons that migrants from Malawi, which is less urbanized and more agricultural, remit less frequently than migrants from Lesotho and Zimbabwe. For many remittance recipients, access to goods such as fertilizers and education are predicated on having access to sufficient cash. The cash supplied by remittances enables access to these product and service markets, which have effects on agricultural productivity and the development of human capital. In all three economies, remittances play a vital role in supporting at-risk households, and in Lesotho and Zimbabwe, remittances are also of macroeconomic significance. By keeping children fed and educated, remittances help to improve the long-term growth prospects of impoverished nations. Facilitating the development of more affordable and efficient remittance markets thus continues to be an important pro-poor policy initiative. However, due to the heterogeneity of markets, there is a need for tailored approaches.

Curated from finmark.org.za