Remittance

Remittances are the transfer of funds between parties as a bill, an invoice, or even a gift. However, "remittance" refers more broadly to the funds migrants send to their relatives in their home country while working and living abroad. These are also referred to as worker or migrant transfers. Remittance means "send back." In terms of money, a remittance is sending money to a recipient who lives abroad. Most families living in slow-growing economies and developing nations rely heavily on these remittances as their primary source of income. Foreign workers who send a portion of their pay to their families back home frequently do this [The Economic Times]. Remittances can be money sent as payment for a bill. However, most remittances involve sending money to relatives. Foreign workers often send them to family members in their home countries. The most common way of remittance is using an electronic payment system through a bank or an electronic money transfer service such as Western Union. People who use these options are generally charged a fee. Transfers can take as little as ten minutes to reach the recipient. Remittances play an increasingly significant role in the economies of small and developing countries. They also play an essential role in disaster relief, often exceeding official development assistance (ODA). They help raise the standard of living for people in low-income nations and help combat global poverty.
In fact, since the late 1990s, remittances have exceeded development aid and, in some cases, make up a significant portion of a country's gross domestic product (GDP). According to the World Bank's Migration and Development Brief, $508 billion in remittances were sent to low- and middle-income countries in 2020. This was followed by $605 billion in 2021. In 2019, they reached an all-time high of $548 billion but declined due to the Covid pandemic. Remittances to these countries are expected to grow to $630 billion in 2022. The amount is more significant than the foreign direct investment and official aid funds sent to these countries (excluding China). Remittances are also used to help those in less developed nations open bank accounts, a trend that helps promote economic development [Investopedia].