Financing Facility for Remittances

IFAD’s Financing Facility for Remittances (FFR) is one of the few entities dealing directly with migrant and remittance-specific issues since its start-up in 2006. The FFR is a US$38 million multi-donor fund which promotes economic opportunities for the rural poor through the support and development of innovative, cost-effective, and easily accessible international and/or domestic remittance services. The core purpose of the FFR is to maximize the impact of remittances on development. Through the promotion of innovative investment, transfer and financially inclusive mechanisms, projects under the FFR have successfully addressed the main gaps affecting the link between remittances and development. As a result, poor rural households have been enabled to advance on the road to financial independence.



IFAD’s strategy consists of promoting mechanisms that support investment in agriculture as a means to increase production, access to markets and food security. Three main tools are used to that effect, first, create an agricultural market knowledge based mechanism that both forms and informs supply (diasporas) and demand (local producers) of investment opportunities, risks and impacts. Second, stimulate diaspora investments in agricultural cooperatives or associations that can receive funds in capital and technical assistance to expand, modernize and increase production and market access. Third, leverage existing migrant foreign savings abroad or savings from remittance recipients, in order to put in place an agricultural investment fund that further support local markets, particularly in places where food security is at stake.



Investment in agriculture is an attractive market for remittance recipients, individual migrants, as well as to diaspora organizations because they ensure food security and protection for their families in the countries of origin, or enhance the of agricultural markets either in domestic or foreign trade because they increase revenues.

The extent of investment in this market depends on the number of immigrants and associations interested in investing in these segments.

Building the individual capacities on both sides of the border is essential to encouraging investment from abroad and the development of successful enterprises in local communities. Finally, transnational relationships need to be fostered between migrants in their countries of residence and of origin, creating inclusive decision-making structures necessary for sustainable businesses that span across borders. Such activities however have limited chance of engaging and benefiting the rural poor without the collaboration of local communities and development partners active on the ground.

IFAD’s strategy is grounded primarily on the creation of partnerships between local communities with skills, expertise and knowledge to run agri-businesses in their home countries, and the diaspora in the hosting countries, owning capital and willing to invest back home. The approach draws on IFAD experience in supporting community-driven development in Somalia, the Philippines, Nepal and Sri Lanka, among others.



In order to minimize the investment risk of migrants' resources and to maximize the potential developmental benefits of the interventions that will be funded, it is the explicit intent of the DIA initiative to leverage diaspora funds through co-funding of market-oriented sustainable initiatives. To that effect, with a focus on the countries where IFAD aims to operate, IFAD counts on local partners in place with whom to establish investment in the agricultural markets.



1. Diaspora Investment in Agriculture (DIA) Initiative In 2011 IFAD and the US Department of State jointly launched the Diaspora Investment in Agriculture (DIA) Initiative, designed to facilitate agricultural investment in post-conflict countries and fragile states, with the goal of creating local jobs and fostering stability through sustainable investment, further seeking to support migrant workers willing to invest in their home communities in some of the most challenging countries in the world. In this context, in 2012, IFAD, jointly with the Federal Government of Somalia and the United States Department of State’s International Diaspora Engagement Alliance (IdEA), financed a US$1.5 million programme, on enhancing Food Security in the Horn of Africa through Diaspora Investment in Agriculture Programme, with the aim at financing innovative diaspora projects in Somalia and Djibouti.

2. Nepal: “Rural Enterprises and Remittances” programme

IFAD is currently implementing a 70 million programme in Nepal together with the Ministry of Industry and in partnership with the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) aiming at providing sustainable sources of income to poor households, migrant families and returnees in the eastern and central regions of Nepal by supporting the creation and expansion of family, micro, small and medium rural enterprises, in the farming and off-farming sectors. The project will target around 60,000 enterprises and 30,000 unemployed youth, and will provide financial education in-country and abroad to improve the savings and investment capacity of over 100,000 people.

3. Asia: Regional programme on “Diaspora Investment in Agriculture and Services and Private Sector Opportunities in Rural Asia (D.I.A.S.P.O.R.A.)” in Pakistan, Philippines, Nepal and Sri Lanka

The project will provide migrant families in communities of origin with appropriate financial products and services and it will assist apex institutions in pooling migrants’ capital and channel it through local financial institutions already serving migrants’ families. The programme focuses on two countries – Pakistan and the Philippines – which have high remittance flows and conducive microfinance environments but also have low financial inclusion ratios (particularly rural). Successful results will be replicated in Nepal and Sri Lanka.

The programme brings forward two innovations: (i) models developed will be a global public good, as they can be replicated in other countries; and (ii) inclusion of an apex institution acting as an agent of the local financial institutions, and on their behalf, provides migrants and their families access to asset-building financial products in their country of origin, and coordinates financial education and product promotion campaigns abroad. In particular, the programme promotes replication within IFAD-funded operations in Nepal and Sri Lanka by creating a community of practice and integrating emerging models and lessons learned into project portfolios.

This programme will develop inclusive, innovative and more accessible financial services, such as savings, investment and working capital loans, insurance and remittances. It will also pioneer new linkages with non-traditional sources of finance for rural development and poverty reduction, to which Asian migrants extensively contribute.

The primary target groups are 20,000 migrant families and their rural communities in Pakistan and the Philippines, and respective diaspora. A strong participation by women and youth will be ensured. The secondary target groups are the financial service providers engaged in the remittance marketplace. The target groups in Nepal and Sri Lanka are migrant family stakeholders, who will benefit from the knowledge-sharing component and learn about programme outcomes and potential for replication.

4. Philippines: "Scaling up Initiatives in Mobilizing Migrant Resources towards Agriculture Development in the Philippines"

The project involves a large consortium of partners: NGOs, national government ministries and agencies, local government agencies, rural financial institutions and cooperatives; MFIs and rural banks. The project scales-up a previous intervention implemented by the Filipino NGO Atikha, which developed models that viably link remittances with productive investment in agriculture and rural development. Implemented between March 2010 and April 2012, Atikha’s project successfully linked diaspora investments with agricultural activities while increasing rural family savings through financial literacy training (for migrants and their families in their hometowns), and leveraged remittances to improve access to financial services.Through information and partnership developed by this project and other advocacy work, national governments have developed migrant/remittance-specific policies, and is funding programmes and services that foster rural economic development through the productive use of migrant capital. The scaling-up proposal developed in this project selected key remittance corridors (countries of migration and regions of origin of migrants) as well as specific regions of origin of migrants were the previous pilot project is now replicated and scaled-up.

5. Senegal: Investment opportunities in rural areas for Senegalese migrants

IFAD is currently involved in a process of identification of investment opportunities in rural areas for Senegalese migrants with a broad range of actors in Senegal and abroad, among which the governments of Senegal and France (ministry of Foreign Affairs and French Development Agency), investment and equity funds, Senegalese MFIs, diaspora organizations and migrant entrepreneurs. Main topics of discussions are i) the institutional framework and potential for investments, ii) models of interventions, and iii) financial intermediaries for potential resource mobilization.

The objective is to facilitate financial intermediation for micro and small enterprises and enhance opportunities of intervention for rural investments for migrants. IFAD already organized two roundtables, respectively in Dakar (March 2014) and Paris (December 2014) which saw the participation of more than 100 representatives in total and produced a series of background documents such as an updated country profile and is currently undertaking a mapping exercise of the migration region and rural SMEs supported by diaspora in Senegal.

For more information: 

• https://www.ifad.org/web/guest/ffr

GFMD 2014-2015 - Roundtable 3.2 "Private sector-Government Partnerships to support migrant/diaspora entrepreneurship and job creation, with a focus on small and medium-sized enterprises​"

International Fund for Agricultural Development (IFAD)

US Department of State