After eight years working in hospitality in Japan and South Korea, Surendra Bal returned home and opened a guest house in Bhojpur district, sourcing vegetables and meat from his own farm instead of buying them elsewhere. “I am able to serve organic meals to my guests,” Bal, 48, told the International Organization for Migration (IOM) in 2022, adding that the arrangement also creates work for his neighbors.

In hill villages across Nepal, a monthly transfer from a family member working in Qatar or Malaysia often decides whether a household eats well, keeps a child in school or repairs a leaking roof. Remittances to Nepal now reach well over a third of the country’s households, and new research shows the money is arriving faster, cheaper and more securely than at any point in the past 30 years, partly thanks to a new generation of digital transfer systems.

A Quarter of the Economy

Remittance to Nepal accounted for 26.3% of the country’s gross domestic product (GDP) in 2023, one of the highest ratios in the world, according to a June 2025 report by the Centre for the Study of Labour and Mobility (CESLAM). Nepali migrant workers sent home approximately $10.76 billion that year, a sum exceeding the combined value of Nepal’s foreign aid, tourism income and exports. Drawing on four editions of the Nepal Living Standards Survey, the report notes that the share of households receiving remittances increased from 10.8% in 1996 to 35.6% in 2023, while the average amount received per household rose by 17 times over the same period, from 18,215 Nepalese rupees (about $330) to more than 315,000 Nepalese rupees (about $2,413).

A Growing Role for Women

Women remitters represent a small yet rapidly growing share of the total. Only 4.5% of remitters were women in 2004, and they contributed only 1.3% of the total value remitted that year. By 2023, women made up 19.9% of remitters and accounted for 10.4% of remittances sent to Nepal, reflecting a broader rise in women’s labor migration over the same period. Women remitters still transfer smaller average amounts than men, mostly because more of them work in lower-paying jobs or in India, where wages for migrant labor remain relatively low.

Formal Channels Replace Informal Ones

The formalization of remittance to Nepal has accelerated sharply over the past decade. Informal channels made up just 7% of the money entering the country in 2023, a drop from 30% in 2011. These informal channels include personal couriers, cash carried home by returning workers and hundi, an unregulated network of brokers who move money between countries through trusted contacts rather than physically transferring cash, verified using a code passed between sender and recipient. Banks and licensed remittance service providers now carry 92.8% of the total value of remittance to Nepal. Recipient households cited daily consumption as the leading use of that income (72.3%), followed by loan repayment tied to the cost of migration itself.

Provincial Gaps Remain

These benefits do not reach every part of the country evenly. Households in Gandaki, Koshi and Bagmati provinces received an average of more than 400,000 Nepalese rupees (about $3,000) in 2023, while those in Sudurpaschim, Karnali and Madhesh received roughly half that amount (about $1,500). The gap traces back largely to destination, meaning migrants from lower-receiving provinces more often work in India, where average earnings and remittance amounts fall short of those from the Gulf states, Malaysia or higher-income countries such as Australia and Japan.

A New Digital Corridor

A new digital payment corridor could help to close the gap. In June 2026, the Nepal Clearing House Limited (NCHL) and the National Payments Corporation of India (NPCI) launched a real-time digital remittance service linking Nepal’s National Payments Interface with India’s Unified Payments Interface, targeting the single largest and lowest-earning corridor in Nepal’s remittance system.

Nepal and India conduct an estimated $1.5 billion to $2 billion in annual financial transactions, with much of it still carried in cash across the open border, according to NCHL Chief Executive Officer Neelesh Man Singh Pradhan. The new system lets Nepali workers in India send money directly through mobile banking apps instead. Eight Nepali banks, including Nabil Bank, Everest Bank and more, connect to the platform, and each transaction carries a service charge of just 150 Indian rupees (about $1.55). Nepal Rastra Bank designed the service to discourage informal networks like hundi and to give migrant workers greater control and security over their earnings, according to central bank spokesperson Guru Prasad Paudel.

Closing the Rural Gap

The International Organization for Migration (IOM) and the International Fund for Agricultural Development (IFAD) have pushed for similar progress nationwide. The two organizations convened a panel in 2024 that found rural financial inclusion still trails urban areas by 10 percentage points and that high transfer costs continue to push some remitters toward informal channels. Government incentives, such as preferential access to company share offerings for migrant workers, are helping narrow that gap alongside continued investment in digital transfer systems.

Looking Ahead

As more of the money flowing into Nepal moves through transparent, low-cost digital corridors, the millions of families who depend on remittance to Nepal stand to keep more of what their families abroad send home, and to receive it faster and more safely than ever before.

– Naveeshaa Rengasamy

Naveeshaa is based in Lille, France and focuses on Global Health and Celebs for The Borgen Project.

Photo: Flickr