Private transfers, especially remittances, can also provide income in rural areas. The sums can be huge—an estimated $60 billion in 2006 in Latin America alone—creating a potentially large source of investment in local economies. But transaction costs of fund transfers are very high, often exceeding 20 percent. Reducing these fees by 5 percentage points could generate annual savings of $3 billion for workers sending money home. Policies should be aimed at reducing transaction costs on remittances and encouraging investment in the local economy.