Linking Remittances and Microfinance

- Submitted by Julia Blue

To highlight the growing opportunities for MFIs to tap into the roughly $200 billion per year sent by international migrant workers to their home countries, USAID's Microfinance After Hours Seminar series hosted the session "Linking Remittances and Access to Microfinance: Opportunities and Challenges" on May 17th in Washington, DC.

Speakers included David Grace of WOCCU , Manuel Orozco of Inter-American Dialogue , and Kai Schmitz of Microfinance International Corporation

According to Manuel Orozco, a typical bank in a major recipient country now derives around 20% of its income from remittances. The resulting linkages with international financial institutions are modernizing the money transfer system and regulatory environment in recipient countries, and demand for financial intermediation is increasing as remittance recipients generally have a higher propensity to save than non-recipients. MFIs are often better placed than banks to offer money transfer services to remittance recipients, especially for clients in rural areas.

Mr. Orozco described several business models adopted by MFIs that offer remittance services:

proprietary models, in which an MFI opens a bank account in a remitting country to collect and transfer remittance payments to its clients;

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Comments

[Mariah]

We have an upcomming community based organisation with an aim of empowering rural communities in Kenya;
How can our small upcoming microfinance institution be involved in your programme.