Economic analysis of the Honduras remittances ecosystem
An assessment of the role remittances have on financial inclusion and development outcomes
- Published by
- USAID
Drawing on a purpose-built survey of over 1,000 remittance recipients, national household data and World Bank fee databases, this report examines the US-Honduras remittance corridor in full.
It maps migration drivers, the dominance of cash-based Money Transfer Operators, and fee structures across payment instruments.
Macroeconomic analysis finds remittances function countercyclically - stabilising consumption through shocks - but with mixed effects on growth, inflation and inequality. At household level, remittances average 34 per cent of recipient income, spent mostly on consumption with little saved or invested, and are associated with reduced labour force participation, especially among women.
Three recommendations follow: improving financial literacy among migrants at remittance sending locations; expanding financial inclusion products and services for recipients in Honduras; and reforming the regulatory environment to reduce barriers to digital remittance transfers.