r emittances and development its impact on u s latin american banking financial institutions
Download
Skip this Video
Download Presentation
R emittances and development : Its impact on U.S./Latin American banking/financial institutions

Loading in 2 Seconds...

play fullscreen
1 / 37

R emittances and development : Its impact on U.S./Latin American banking/financial institutions - PowerPoint PPT Presentation


  • 268 Views
  • Uploaded on

R emittances and development : Its impact on U.S./Latin American banking/financial institutions Manuel Orozco, Senior Fellow & Project coordinator MIF-IFAD Remittances and Development Program Washington, DC International Payments Systems, October 7 th , 2004

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about 'R emittances and development : Its impact on U.S./Latin American banking/financial institutions' - liam


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
r emittances and development its impact on u s latin american banking financial institutions

Remittances and development: Its impact on U.S./Latin American banking/financial institutions

Manuel Orozco, Senior Fellow & Project coordinator MIF-IFAD

Remittances and Development Program

Washington, DC

International Payments Systems,

October 7th, 2004

Federal Reserve Bank of Atlanta

Atlanta, Georgia

policy dimensions of remittances
Policy dimensions of remittances
  • Dynamics of remittances
  • Benefit to households
  • Distributive nature
    • Rural Sector
    • Country
  • Macro-economico Impact
    • FC source
    • Counter-cyclical role
    • Multiplying effect
  • Tied to finance
  • Part of a broader process:
  • The 5Ts
  • Problems
  • Transaction Costs
  • Limited competition
  • Limited participation of S&C institutions
  • Security
  • No economic policy

Opciones o soluciones

  • Latin America
  • Monitor money transfers, particularly the exchange rate
  • Motivate banks through tax and other rewards to reach out to remittance senders and recipients.
  • Open low-maintenance banking facilities in areas near remittance receiving households
  • Offer first time deposit accounts with varying financial incentives;
  • Attract remittance senders into the home country’s banking system;
  • Allow and enable credit unions, micro-finance institutions, and popular banks as remittance agents and deposit holders.
  • Promote the adoption of new technologies for the poor.
        • United States
  • Expand the acceptable forms of identity used by banks:
  • Expand financial services that banks and CUs offer to immigrants
  • Partnerships with community based organizations to create social bridges.
  • Enhance the role of the Community Reinvestment Act (CRA)
  • Link financial literacy to the value of remittances.
  • Promote strategic alliances among U.S. and Latin American banks and money transfer businesses.
  • Disclosure
the national income equation in latin america a rent seeking and courtesan state
The national income equation in Latin America: a rent seeking and courtesan state?

GDP: (X-M) + I + G + C

-Maquila, Tourism, Non-traditional exports

-Transportation, Telecommunication, Nostalgic Trade

-DOMESTIC SAVINGS - INVESTMENT

-FOREIGN SAVINGS - INVESTMENT

-FDI: Transnational capital, migrant capital investment

-TECHNOLOGY TRANSFER

-UNILATERAL TRANSFERS

-ODA- BILATERAL & MULTILATERAL

-PRIVATE DONATIONS

FOUNDATIONS, PPOs, HTAs

-WORKER REMITTANCES

slide4
Immigrant economic practices

(annual expenses)

Capital

investment

Consumption

Family remittances

Donations

Trade and

services retail

(US$3,000)

Community

(US$10,000 year)

Household economy

(US$270)

Property

and other I

(US$5,000)

slide13
Globalization: Percent of people who send remittances and buy home country goods, call regularly home, donate, travel and spend money in their home country
slide14
Crisis bancaria en RD

Crisis ec. en Ecuador

Crisis del café

en Guatemala

Source: Central Bank of each country. Estimates for Cuba, Haiti and Nicaragua

percent of remittance senders who say they visit home country
Percent of remittance senders who say they visit home country (%)

Datos recogidos de la encuesta e inmigrantes enNew York conducida por el autor, administrada por Emmanuel Sylvestre & Assoc. Resultados presentados en Orozco, Manuel (2004), Distant but close: Guyanese transnational communities and their remittances from the United States Inter-American Dialogue, Informe encargado por la U.S. Agency for International Development. Washington, DC. Enero..

remittance senders frequency of calls to relatives
Remittance senders: frequency of calls to relatives (%)

Datos recogidos de la encuesta e inmigrantes enNew York conducida por el autor, administrada por Emmanuel Sylvestre & Assoc. Resultados presentados en Orozco, Manuel (2004), Distant but close: Guyanese transnational communities and their remittances from the United States Inter-American Dialogue, Informe encargado por la U.S. Agency for International Development. Washington, DC. Enero..

phone calls to selected latin american countries
Phone calls to selected Latin American countries

Source: Encuesta de inmigrantes en New York; US Census Bureau; 2000 and 2001 International Telecommunications Data, Linda Blake and Jim Lande.

Washington, FCC, December 2001, and January 2003. * calculo basedo en un promedio de 4 llamadas al mes por 5, 8, 15, 25 y 30 minutos por llamada

Formula utilizada es ∑ de llamadas = minutos anuales * Porciento que llama * Porcentaje inmigrantes que remiten (Censo 2000 de pobl.)

remittance senders who buy home country goods
Remittance senders who buy home country goods (%)

Data reported from survey of immigrants in New York conducted out by the author, administered by Emmanuel Sylvestre and Assoc. Results reported in Orozco, Manuel (2004), Distant but close: Guyanese transnational communities and their remittances from the United States Inter-American Dialogue, Report commissioned by the U.S. Agency for International Development. Washington, DC. January..

purchase of nostalgic goods by nicaraguan remittance senders
Purchase of nostalgic goods by Nicaraguan remittance senders

125,000 personas que gastan $100 anuales en queso: $12.5 millones. Exportación Nicaraguense de queso es aprox. $30 millones.

immigrants and bank accounts
Immigrants and bank accounts

Source: Data reported from survey of immigrants in Chicago, DC, New York, Los Angeles and Miami commissioned by the author, administered by Emmanuel Sylvestre, Protectora Inc. August 2003.

slide26
International money transfer operation

TWO DATA

STREAMS

MTC’s bank

MTC’s

Agent

POS

Money

Transfer

Company

Data Transfer

Report

(customer’s

sending

Information)

Remittance

sender

Wire Transfer

(cash transfer

Amount)

Regulatory

Environment

Compliance

Monitoring

AD’s bank

MTC: Money transfer company

POS: Point of sale

AD: Agent distributor (on receiving side)

MTC’s

Agent

POS

MTC’s rec. country

Agent Distributor

Players: MTO, agents at POS, distributing agents, banks

Type of MTO player:

-Transfer: WT, MO, hand delivery

-Scope: National, Regional/country; Financial; CU, unlicensed

Remittance

recipient

banks remittances and immigrants

Banks, Remittances and immigrants

Identified 100 banks accepting consular ID

Building of pricing dataset of 60 banks

Qualitative Interviews to 22 banks and credit unions

RESULTS-

charges made by banks and credit unions to transfer remittances to mexico by method used
Charges made by banks and credit unions to transfer remittances to Mexico (by method used)
banking the unbanked mainstreaming latinos as financial agents
Banking the unbanked: mainstreaming Latinos as financial agents
  • The interest of financial institutions is not on the transfers, but on making a long term relationship with the sender.
  • Two approaches:
    • Focusing on specific strategies to the Hispanic market
    • Use of the same marketing tools to bring Hispanics.
    • Result: mainstreaming Latinos as financial agents.
  • Two premises:
    • Realistic approach about what to offer and how.
    • Accept Mexico’s Matricula Consular as a valid form of identification to open a bank account.
  • Financial services offered
  • Marketing tools
  • Expected results
ad