Remittances and Entrepreneurial Development in Emerging Economies

Abstract

Remittances have become one of the most important sources of external financial resources for emerging economies, providing households, entrepreneurs, and communities with additional capital for consumption, investment, and business development. The continuous growth of international migration has increased the importance of remittance flows as a mechanism through which financial resources are transferred from migrant workers to their countries of origin. In many emerging economies, remittances represent a significant source of income and often exceed other external financial flows, creating opportunities for entrepreneurship, small business development, and economic empowerment. Research has shown that remittances can contribute to development by improving access to finance, supporting new business creation, and reducing financial constraints faced by entrepreneurs.  This research examines the relationship between remittances and entrepreneurial development in emerging economies by analyzing how migrant financial transfers influence business creation, entrepreneurial investment, small enterprise growth, and economic transformation. The study explores the role of remittances as an alternative source of entrepreneurial finance, particularly in economies where formal financial institutions provide limited access to credit. Many potential entrepreneurs face barriers such as insufficient collateral, high borrowing costs, and weak financial infrastructure. Remittances can overcome some of these challenges by providing households with capital that can be invested in productive activities.