Sending Money Home IELTS Reading: Answers and Detailed Explanations

The reading passage Sending Money Home explores the economics of migrant remittances sent back to developing countries. Surpassing the scale of official development aid, these remittances serve not only as a vital lifeline for families facing political and financial instability but also as a significant economic lever. However, barriers such as exorbitant transfer fees and complex administrative procedures continue to erode a substantial portion of this capital. This practice test challenges candidates with two question types: Matching Headings and Summary Completion. Below is a detailed breakdown, including a translation and a summary of key academic vocabulary to help you better understand the passage.

Reading Passage

Sending money home

The economics of migrant remittances

[Paragraph A] Every year millions of migrants travel vast distances using borrowed money for their airfares and taking little or no cash with them. They seek a decent job to support themselves with money left over that they can send home to their families in developing countries. These remittances exceeded $400 billion last year. It is true that the actual rate per person is only about $200 per month but it all adds up to about triple the amount officially spent on development aid.

[Paragraph B] In some of the poorer, unstable or conflict-torn countries, these sums of money are a lifeline – the only salvation for those left behind. The decision to send money home is often inspired by altruism – an unselfish desire to help others. Then again, the cash might simply be an exchange for earlier services rendered by the recipients or it could be intended for investment by the recipients. Often it will be repayment of a loan used to finance the migrant’s travel and resettlement.

 

[Paragraph C] At the first sign of trouble, political or financial upheaval, these personal sources of support do not suddenly dry up like official investment monies. Actually, they increase in order to ease the hardship and suffering of the migrants’ families and, unlike development aid, which is channelled through government or other official agencies, remittances go straight to those in need. Thus, they serve an insurance role, responding in a countercyclical way to political and economic crises.

 

[Paragraph D] This flow of migrant money has a huge economic and social impact on the receiving countries. It provides cash for food, housing and necessities. It funds education and healthcare and contributes towards the upkeep of the elderly. Extra money is sent for special events such as weddings, funerals or urgent medical procedures and other emergencies. Occasionally it becomes the capital for starting up a small enterprise.

 

[Paragraph E] Unfortunately, recipients hardly ever receive the full value of the money sent back home because of exorbitant transfer fees. Many money transfer companies and banks operate on a fixed fee, which is unduly harsh for those sending small sums at a time. Others charge a percentage, which varies from around 8% to 20% or more dependent on the recipient country. There are some countries where there is a low fixed charge per transaction; however, these cheaper fees are not applied internationally because of widespread concern over money laundering. Whether this is a genuine fear or just an excuse is hard to say. If the recipients live in a small village somewhere, usually the only option is to obtain their money through the local post office. Regrettably, many governments allow post offices to have an exclusive affiliation with one particular money transfer operator so there is no alternative but to pay the extortionate charge.

 

[Paragraph F] The sums of money being discussed here might seem negligible on an individual basis but they are substantial in totality. If the transfer cost could be reduced to no more than one per cent, that would release another $30 billion dollars annually – approximately the total aid budget of the USA, the largest donor worldwide – directly into the hands of the world’s poorest. If this is not practicable, governments could at least acknowledge that small remittances do not come from organised crime networks, and ease regulations accordingly. They should put an end to restrictive alliances between post offices and money transfer operators or at least open up the system to competition. Alternately, a non-government humanitarian organisation, which would have the expertise to navigate the elaborate red tape, could set up a non-profit remittance platform for migrants to send money home for little or no cost.

 

[Paragraph G] Whilst contemplating the best system for transmission of migrant earnings to the home country, one should consider the fact that migrants often manage to save reasonable amounts of money in their adopted country. More often than not, that money is in the form of bank deposits earning a tiny percentage of interest, none at all or even a negative rate of interest.

 

[Paragraph H] If a developing country or a large charitable society could sell bonds with a guaranteed return of three or four per cent on the premise that the invested money would be used to build infrastructure in that country, there would be a twofold benefit. Migrants would make a financial gain and see their savings put to work in the development of their country of origin. The ideal point of sale for these bonds would be the channel used for money transfers so that, when migrants show up to make their monthly remittance, they could buy bonds as well. Advancing the idea one step further, why not make this transmission hub the conduit for affluent migrants to donate to worthy causes in their homeland so they may share their prosperity with their compatriots on a larger scale?

 

Questions

Questions 1–7: Matching Headings

Reading Passage 1 has eight paragraphs, A–H.

Choose the correct heading for paragraphs A–F and H from the list of headings below.

Write the correct number, i–xi, in boxes 1–7 on your answer sheet.

List of Headings

• i. Stability of remittances in difficult times

   

• ii. Effect of cutback in transaction fees

   

• iii. Targeted investments and contributions

   

• iv. Remittances for business investment

   

• v. How to lower transmission fees

   

• vi. Motivations behind remittances

   

• vii. Losses incurred during transmission

   

• viii. Remittances worth more than official aid

   

• ix. How recipients utilise remittances

   

• x. Frequency and size of remittances

   

• xi. Poor returns on migrant savings

   

(Example: Paragraph G — xi)

 

• 1. Paragraph A

   

• 2. Paragraph B

   

• 3. Paragraph C

   

• 4. Paragraph D

   

• 5. Paragraph E

   

• 6. Paragraph F

   

• 7. Paragraph H

   

Questions 8–13: Summary Completion

Complete the summary below.

Choose NO MORE THAN TWO WORDS from the passage for each answer.

Write your answers in boxes 8–13 on your answer sheet.

Countries are unwilling to enforce lower transaction fees as they are worried about 8. _______________, and villagers lose out when post offices have a special relationship with one particular money transfer agency.

 

Each remittance might be small but the total cost of remittance fees is huge. Governments should 9. _______________ on small amounts and end the current post office system or make it more competitive. Another idea would be for a large non-profit association, capable of handling complicated 10. _______________ to take charge of migrant remittances.

 

Migrants who send money home are able to save money, too, but it receives little or no interest from 11. _______________. If a country or organisation sold bonds that earned a reasonable rate of interest for the investor, that money could fund the development of homeland 12. _______________. The bonds could be sold at the remittance centre, which could also take donations from 13. _______________ to fund charitable projects in their home country.

Full Translation of the Reading Passage

[Paragraph A] Every year, millions of migrants travel vast distances using borrowed money for airfare, often carrying little or no cash. They seek decent employment to support themselves and save the remainder to send home to their families in developing countries. Total remittances exceeded $400 billion last year. While the actual average amount per person is only about $200 per month, the cumulative total is roughly triple the amount officially spent on global development aid.

[Paragraph B] In some poorer, unstable, or conflict-torn countries, these funds are a lifeline—the only salvation for those left behind. The decision to send money home is often inspired by altruism—an unselfish desire to help loved ones. Alternatively, the cash may simply be a repayment for services previously rendered by the recipients, or intended for investment. Often, it also serves to repay loans used to finance the migrant’s travel and resettlement.

[Paragraph C] At the first sign of political or financial trouble, these personal sources of support do not suddenly dry up like official investment funds. In fact, they often increase to ease the hardship and suffering of the migrants’ families. Unlike development aid, which must pass through governments or intermediary agencies, remittances go directly to those in need. Thus, they act as a form of insurance, responding in a countercyclical manner to political and economic crises.

[Paragraph D] This flow of migrant money has a massive economic and social impact on receiving countries. It provides cash for food, housing, and basic necessities. It funds education and healthcare and contributes to the care of the elderly. Additional funds are sent for special events such as weddings, funerals, or emergency medical procedures. Occasionally, this money becomes capital for starting a small business.

[Paragraph E] Unfortunately, recipients rarely receive the full value of the money sent home due to exorbitant transfer fees. Many money transfer companies and banks apply fixed fees, which is highly unfair to those sending small amounts at a time. Others charge a percentage, ranging from 8% to 20% or more depending on the recipient country. Some countries have low fixed charges; however, these cheaper rates are not applied internationally due to widespread concerns about money laundering. It is difficult to determine whether this is a genuine fear or merely a pretext. If recipients live in a remote village, the only option is often to collect money through the local post office. Regrettably, many governments allow post offices to enter into exclusive agreements with a single transfer operator, leaving residents with no choice but to pay the extortionate fees.

[Paragraph F] The sums discussed here may seem negligible on an individual basis, but their total scale is immense. If transfer costs could be reduced to no more than 1%, it would release an additional $30 billion annually—equivalent to the entire aid budget of the USA, the world’s largest donor—directly into the hands of the world’s poorest. If this is not feasible, governments could at least acknowledge that small remittances do not originate from organized crime networks and ease regulations accordingly. They should end restrictive alliances between post offices and transfer operators, or at least open the market to competition. Alternatively, a non-governmental humanitarian organization with expertise in navigating complex bureaucracy could establish a non-profit remittance platform for migrants with minimal or no fees.

[Paragraph G] While considering the optimal system for transmitting migrant earnings home, we must also recognize that migrants often manage to save a reasonable amount in their host countries. However, most of this money sits in bank accounts earning very low interest, no interest at all, or even incurring negative interest rates.

[Paragraph H] If a developing country or a large charitable organization could issue bonds with a guaranteed return of 3% to 4%, based on a commitment to use those funds for domestic infrastructure, it would create a twofold benefit. Migrants would gain a financial return while seeing their savings contribute directly to their homeland’s development. The ideal point of sale for these bonds would be the transfer channels themselves, allowing migrants to purchase them while sending their monthly remittances. Extending this idea further, why not turn these hubs into conduits for affluent migrants to contribute to meaningful causes back home, thereby sharing their prosperity with their compatriots on a larger scale?

Academic Vocabulary Summary

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