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A sustainable poverty-eradication policy boost

From Remittance to Microcredit. A sustainable poverty-eradication policy boost. Valentino Piana Paulos Kesete Penang, 5th December 2007. Table of contents. 1. Microfinance as a tool for human and economic development. 2. The sources of funds for microfinance.

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A sustainable poverty-eradication policy boost

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  1. From Remittance to Microcredit A sustainable poverty-eradication policy boost Valentino Piana Paulos Kesete Penang, 5th December 2007

  2. Table of contents 1. Microfinance as a tool for human and economic development 2. The sources of funds for microfinance 3. Remittances: an interesting complementary source of funds 4. Advantages at the country level and in the structure of the world 4.1. The structure of power in Asia in 2003 4.2. The main flows of remittances in Asia 5. Conclusions www.economicswebinstitute.org Cutting-edge research & implementation consulting

  3. ABOUT 100 MILLIONS OF CLIENTS (SOURCE; MICROCREDIT SUMMIT 2006) 1. Microfinance as a tool for human and economic development help the poor to help themselves activate the entrepreneurship of the family and the community arrive to places and social groups often overlooked by other financial actors enhance small projects, usually with a low environmental impacts www.economicswebinstitute.org Cutting-edge research & implementation consulting

  4. International donations Governments finance Microfinance institution Clients Private donations Loans Remittances 2. The sources of funds for microfinance Note that in 2003, remittances were higher than FDI in 66 countries out of 154 www.economicswebinstitute.org Cutting-edge research & implementation consulting

  5. 3. Remittances: an interesting complementary source of funds ADVANTAGES FOR MFI ADVANTAGES FOR MIGRANTS Money back Control over use Activate family entrepreneurship Shorter time horizon for coming back home Micro repayments Stable flows Efficiency We are already making an experiment in Ecuador www.economicswebinstitute.org Cutting-edge research & implementation consulting

  6. 4. Advantages at the country level and in the structure of the world ADVANTAGES FOR THE RECEIPIENT COUNTRY ADVANTAGES FOR THE STRUCTURE OF THE WORLD Especially if channelled to microfinance, remittances are systemic countervailing factor to trade domination. New local entrepreneurshipInternational knowledgetransferImprovement in the balance of payments In March 2006, we presented at Princeton University a formalized model of bilateral power among nations www.economicswebinstitute.org Cutting-edge research & implementation consulting

  7. Integration Dependent Destination Interconnection Dominance Japan China Mono out Integration Mono In-integration Destination Dominance India Source Dominance Source Dependence Vietnam The Philippines Thailand Dominant Destination Interconnection Malaysia Indonesia Dominant Source Interconnection Singapore Destination Dependence Dependence Dependent Source Interconnection 4.1. The structure of power in Asia in 2003 www.economicswebinstitute.org Cutting-edge research & implementation consulting

  8. 4.2. The main flows of remittances in Asia Japan China India Vietnam The Philippines Thailand Malaysia Indonesia Singapore www.economicswebinstitute.org Cutting-edge research & implementation consulting

  9. 5. Conclusions Channelling remittances to microfinance is a relevant opportunity. But to influence the structure of the world bold policies are needed. We at EWI are working in two further directions: Proximity international trade Bilateral import promotion We are networking researchers, policymakers & businessmen to foster the change www.economicswebinstitute.org Cutting-edge research & implementation consulting

  10. Feel free to write to us! director@economicswebinstitute pkesete@yahoo.com Thank you for your kind attention. www.economicswebinstitute.org Cutting-edge research & implementation consulting

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