Remittances are the transfer of money from individuals living abroad to individuals living in their home country. Inward remittances not only benefit individuals and families but also countries as it is part of their GDP. They can help with economic growth and development, reduce poverty, and improve social cohesion.
According to the World Bank, India, Mexico, China, the Philippines, and Egypt were the top remittance recipient countries in 2022. These top 5 recipient countries received a total of $281 billion, representing over half of all remittances worldwide.
Let’s take a look at the top 5 remittance recipient countries, with a particular emphasis on Egypt. As the most populous country in the MENA region, comprising 23% of its population, Egypt receives over 32 billion dollars in remittances. However, a significant portion of its population—more than 50%—is unable to access formal financial services.
The Top 5 Remittance Countries in 2022
India’s Record-Breaking $100 Billion in Remittances
India received a record-high $100 billion in remittances in 2022, making it the top recipient among all countries. The majority of these funds were sent by Indian workers in the United States and the United Arab Emirates.
Mexico’s $60 Billion Remittance Boost
Mexico received $60 billion in remittances in 2022, making it the second-largest recipient among all countries. Most of these remittances were sent by Mexicans working in the United States.
China Places Third in Remittance Rankings with $51 Billion
China received $51 billion in remittances in 2022, making it the third-largest recipient among all countries. Most of these remittances were sent by Chinese workers abroad, particularly from countries such as South Korea, the United States, and Japan.
The Philippines Receives $38 Billion in Remittances in 2022, Ranking Fourth Globally
The Philippines received $38 billion in remittances in 2022, making it the fourth-largest recipient worldwide. A significant portion of these remittances came from Filipinos working abroad, particularly in countries like the United States, Saudi Arabia, and the United Arab Emirates.
Egypt Ranks Fifth in Remittance Receipts with $32 Billion in 2022
Egypt received a total of $32 billion in remittances in 2022, making it the fifth-largest recipient among all countries. A large portion of these remittances was sent by Egyptian workers abroad, particularly in the United States, Saudi Arabia, and Kuwait.
Egypt’s Remittance Market and Financial Inclusion
Inward remittance plays a significant role in the economy of Egypt. These funds play a vital role in supporting families and communities in Egypt, particularly in rural areas where other sources of income may be limited.
However, despite the importance of inward remittances in Egypt, financial inclusion remains a challenge in the country. More than 50% of the population in Egypt is unbanked, meaning they do not have access to formal financial services. This lack of access to financial services can make it difficult for individuals to receive and manage the money they receive through remittances, which can impact their financial stability and security.
To address this issue and improve financial inclusion in Egypt, the Central Bank of Egypt has taken many initiatives aiming toward a digital economy.
The Financial Inclusion Strategy (2022-2025) emphasizes the Central Bank of Egypt’s eagerness to cooperate with all state authorities, in order to provide useful and affordable banking services to all segments of society. This strategy also aims at supporting fintech startups to develop and innovate financial services to offer more accessible services and products to customers, mainly the unbanked population of Egypt. Moreover, the Egyptian government has created policies that make it easier to send money to Egypt. These policies include building an efficient and secure payment system, setting favorable exchange rates, and helping people who receive remittances by increasing financial education. There are also fintechs that enable sending money to Egypt safely and affordably through banks, money transfer operators, and mobile phone payment systems.
By addressing the unbanked population’s challenges, it will be possible to increase access to financial services in Egypt and improve the financial stability of its population. This, in turn, could help to maximize the impact of inward remittance in the country.
Purpl acknowledges the Importance of Remittances
We, at Purpl, believe that remittances are important for economic growth and development, reducing poverty, and improving social cohesion. As a fintech in the remittance market, our main goal is to expand access to financial services and help achieve financial inclusion. We are an aggregator that opens the Lebanese corridor and eventually the MENA region to new digital remittance platforms that operate at a lower cost than traditional players and whose goal is to reduce cross-border money transfer costs.
Written by: Rim Ghandour