It is increasingly coming to be understood that migrant remittances (ie. resource flows by diaspora communities back to their “place of origin”) have been wildly underestimated by development specialists in the past – both in quantitative terms and in terms of their qualitative impact. It is now appreciated that such remittances may actually exceed official development assistance in many developing countries – in some cases, by several hundred percent. It is also coming to be appreciated that remittances are at the centre of an alternative “bottom-up” model of development assistance that contrasts strongly (and favourably) with the traditional “top-down” development model associated with the World Bank, the other multilateral development institutions and traditional ODA. Unlike, say, World Bank loans or IDA credits, the money transferred through remittances actually goes to those who want it and can use it – not to layer after layer of government bureaucracy which has its own agenda, and which siphons off a large proportion of the total transferred for its own benefit.

This paper is an attempt to explain how the remittance business works in the UK, who it benefits and what the real downside is (if there is one at all).