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Understanding how digital remittances contribute to women’s financial health

Financial health is an emerging topic of research and practice that includes four important aspects of an individual’s financial life: financial security, financial resilience, financial control and financial freedom. Financially healthy migrants can effectively meet their immediate needs, absorb financial shocks, fulfil financial goals and feel secure in their financial situation. However, gender roles, norms and inequalities often impact the sums, frequency and channels used to send and receive remittances.

According to data, women migrants send money frequently and tend to remit a larger portion of their income than men.[1] In developing nations where women may have limited access to formal financial institutions and experience gender-based economic inequality, digital remittances can be particularly helpful in promoting women’s financial health. The World Bank estimates that these remittances totaled USD 540 billion in 2020, with a large fraction of recipients being women and low- and middle-income countries receiving the majority of these funds. Such transactions may account for a substantial portion of the economy in some nations, as was the case in the Philippines in 2020, where remittances made up 9.8% of the GDP.[3]

Studies have revealed that financial empowerment of women can be significantly impacted by digital remittances. For instance, the International Fund for Agricultural Development found that women who receive remittances are more inclined to engage in entrepreneurial activities and other strategic investments.[4] Remittances can also assist women in building savings and assets, which may serve as a shield against economic shocks and a base for long-term financial security.

Digital remittances can also make it easier for women to manage financial emergencies, which is a fundamental indicator of their financial resilience. In addition, these remittances can support women by preventing issues associated with traditional remittances, such as high transaction fees and limited access to formal financial services.

It is critical to recognise the role that digital remittances can play in transforming the lives of women all over the world. At Al Ansari Exchange, we are cognizant of the positive impact that digital remittances can have in supporting women’s financial health by providing greater accessibility, affordability and empowerment, as well as entrepreneurship and education opportunities for long-term growth. As we observe the International Women’s Day this month, it is also imperative that we acknowledge women in our society for their significant contributions. Women have always revolutionized various facets of the society and promoted change in standards of living, and they continue to do so even today.    

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