Presentation Prepared for the FDIC Advisory Committee on Economic Inclusion Providing Access to Financial Services: The Roles of Banks and Money Transfer Organizations Washington, DC, October 24, 2007. Summary. Remittances are radically different international payment flows.
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FDIC Advisory Committee on Economic Inclusion
Providing Access to Financial Services: The Roles of Banks and Money Transfer Organizations
Washington, DC, October 24, 2007
A steady, non-volatile, growing source of balance of payments support
Source: World Bank (Dilip Ratha). 2003. “Workers’ Remittances—An Important and Stable Source of External Development Finance.” In Global Development Finance 2003 (chapter 7). Washington, D.C.: World Bank.
FDI, Capital Market Flows
“Bummer of a birthmark, Hal.”
The combination of historical regulatory hostility and some banks’ desire to enter the market makes it tough to be a competitive LRC with an account at a large bank.
Accounts are closing left and right. Why?
Lower fees, better forex
Open nights, weekends
Faster than bank wires
Licensed, bonded, examined
Recipients have a voice
We’re in touch with both the sender and the recipient, and are truly in a position to do this.
How do LRCs stack up?
Public and private health care systems in developing countries can come under severe pressure from non-participation or from premium payment arrears.
Remittance senders effectively self-insure against sickness of their families.
Offering remittance senders the option of directing partial payment to ensure that their recipient is up to date on health care premiums is a win-win-win proposition:
LRCs, with sender/receiver relationships, are in a unique position to offer this specialized payments service.
Together, we can make sure that remittance customers are well served, and that the massive capital flows that remittances represent can have the greatest poverty alleviation and development impact possible.
Paul Dwyer, CEO
(301) 215-9294 ext 102