Nevertheless, it also reflects that families tend to become remittances-dependent and stop engaging in other income-generating activities.

These findings from Nepal and Sri Lanka are not surprising when taking into account that many migrate due to the lack of economic opportunities close to home and out of the need to provide food, shelter and clothing to their families. Furthermore, knowledge of financial literacy, including financial planning and budgeting, financial services and concepts of savings are often lacking. Financial literacy incorporates knowledge, skills and attitudes “to make informed judgements and to take effective actions regarding the current and future use and management of money. It includes the ability to understand financial choices, plan for the future, spend wisely, and manage the challenges associated with life events such as a job loss, saving for retirement, or paying for a child’s education, as a US Government Accountability Office report describes. The importance of financial literacy for sound remittances management has been confirmed by field experiences gathered in the context of implementing a Helvetas project.

A stepping stone for sustainable economic development

When designing measures to support migrants and their families interested in establishing small businesses as a productive investment of their remittances, it became evident that most families in the targeted areas in Sri Lanka and Nepal were not able to save remittances and establish alternative income sources.