Indebtedness is a key driver of labour migration – many households opt for a family member to work overseas and send remittances in order to pay off accrued debts at home.

Compounding this, however, the costs of migration prevent many aspiring workers from being able to migrate unless they can borrow money to cover the costs associated with acquiring documentation, arranging travel, securing employment and other expenses.

For numerous migrant workers, debt is thus a driver of migration but also a precondition for making an income in order to create a better life for themselves and their families.

Often labour migrants also accrue debt – both at home and at their destination – while working overseas.

This can lock them into cycles of continued work to get out of debt but also compounding debts that demand more work, and so on.

Such indebtedness limits their own and their families’ freedom, making them dependent on loan providers and their terms and conditions.

This can both increase the risks of human trafficking and limit the potential for positive outcomes from labour migration. Migration debt, as Lindquist (2010) points out, makes migrants significantly more vulnerable, frequently resulting in control, abuse, financial difficulty, and restricted freedom of movement.

Debt can be used to compound other means of coercion that keep workers in conditions of forced labour, for example, enduring poor working or living conditions as they have no other choice than to stay and repay the debts. 

Report by ODI