Migrants face unique challenges in the use of their key financial instrument: remittances. Some of those challenges are tied to broader issues of financial inclusion for unbanked or underbanked customers; others relate to the use of informal remittance channels, which is particularly common in remittance corridors with high costs, large differences between official and unofficial exchange rates, and/or inadequate financial market infrastructure. Other central issues involve regulatory challenges, including those related to customer identification, and the broad challenges of digitizing services.

Addressing these challenges would present great development opportunities, with digital remittance services acting as an entry point to broader digital financial inclusion of migrant workers and remittance recipients. Further, shifting remittances from informal to formal channels would improve estimates of foreign exchange reserves and could impact sovereign credit ratings.

Over the course of the past year, key stakeholders from the private and public sectors have convened to tackle these issues in EPoD and HKS Executive Education (HKSEE)’s custom program, Migrant Remittances and Financial Services, developed and delivered in collaboration with the United Nations Capital Development Fund (UNCDF).

The program included two modules. The first, a January online HKSEE program, brought together a cohort of 67 participants from central banks, remittance service providers, and migration-focused NGOs and multilateral organizations, representing key migration corridors in South and Southeast Asia, East and West Africa, the Gulf States, and Europe. Faculty chair Professor Jay Rosengard and other HKS experts lectured on topics related to digital financial services, the implications of Covid-19 for migration, and financial inclusion more broadly. Participants simultaneously worked in groups to explore steps 1-4 of EPoD’s Smart Policy Design and Implementation (SPDI) approach: (1) Identify a pressing policy problem; (2) Diagnose underlying causes; (3) Design high-potential and feasible policy solutions; and (4) Implement and monitor solutions on the ground.

The second module – an in-person follow-up workshop for a subset of participants – took place from August 9th to 11th. 14 participants – representing central banks, migration-oriented ministries, remittance service providers, and multilateral institutions – convened in Cambridge to revisit the SPDI approach and complete its final two steps: (5) Test high-potential solutions with rigorous evaluation; and (6) Refine solutions based on continuous monitoring and feedback.

About the workshop

The workshop took a deeper dive into the remittance industry and how to leverage its potential as a transformative digital service for migrants. Participants came from a wide array of institutions with an interest in financial services for migrants, allowing for candid conversations that might not otherwise take place between, for example, regulators and remittance service providers. This created space for migrant-centric, gender-sensitive dialogue about remittances. As Professor Rosengard emphasized in his opening session: “Migrants are more than labor, and remittances are more than money.”

Other faculty lecturers included Harvard Professors Shawn Cole, Julie Wilson, and Guy Stuart, HKS Ash Center affiliate and executive director of Microfinance Opportunities (MFO). The workshop also included an industry panel discussion in which Diego Fleischmann (Migrante), Jonathan Hakim (Cignifi), and Anna Wallace (Bill & Melinda Gates Foundation) discussed the roles of banks, regulators, and fintechs in formalizing remittances.

The workshop aimed to deepen and strengthen learnings from the January program and to help participants apply SPDI directly to their work, creating meaningful change in the field. With the guidance of Harvard Teaching Fellows, participants worked to develop SPDI-guided solutions for their individual projects including, among others:

• Digital money collection services in rural Burkina Faso
• Financial literacy campaigns for Nepalese migrants
• Improved access to savings products for migrant workers from Georgia and Moldova
• Incentives to use formal remittance channels in Bangladesh

90% of surveyed participants indicated that they were likely to implement their SPDI-guided solutions. EPoD looks forward to following up with participants as they return to their roles in the field, and UNCDF will continue to provide support to participants to ensure that they are able to design migrant-centric, gender-sensitive financial policies and products.

Click here to read more about the EPoD-UNCDF collaboration.