Recent decades have seen a spectacular rise of the remittance industry, drawing maximum eyes and attention upon it. International money transfer has the greatest benefits for the economy of the receiving countries due to abundant monetary inflows. These benefits of the remittances fall under two broad categories:
- Micro-level impacts (individual and households)
- Macro-level impacts (country-level)
Micro-level Benefits of Remittances
Remittances are primarily sent to the relatives, friends and family members of the foreign settler. Thus, individuals and households have a direct impact on the remittance and receive major advantages, such as:
- It increases individual well-being by improving living conditions
- It leads to human capital accumulation with improved sanitary conditions, healthier lifestyles, proper healthcare etc.
- It enhances savings, business investments and promotes financial literacy
- It stabilizes household income
- It reduces poverty
- It funds quality education to the budding generation that will turn out to be a great investment for the country.
Macro-level Benefits of Remittances
Remittances sent to the family members have an indirect impact on the receiving country as a whole. As the living conditions of its citizens are at a hike with the remittance and the poverty is drastically reduced, the country has many benefits of its own. Some of the major advantages at the country level:
- Its contribution to the country’s economic stability
- It is a stable source of income
- It improves the country’s credit rating
- It facilitates the inflow of new investments
- It enhances the country’s creditworthiness
Studies have shown that the periodicity and predictability of the remittance flows affect their impact on the receiving country. Millions of transactions coming from the best online money transfer in Australia are being used productively by the developing countries to reap the benefits for their economic prosperity and sustainable development.