the mif blog

By: Caitlin Sanford and Rebecca Rouse 

Mexican families incorporated more than $24.8 billion in international remittances into their household financial portfolios last year. But how much do we know about the way that this money is spent, saved, and invested over time? The Remittances and Savings Program of the Multilateral Investment Fund partnered with Bankable Frontier Associates (BFA) to examine the cash flows of 16 households in the Mexico Financial Diaries that received international remittances. The findings of this study, available for download here, help dispel three common misconceptions that many may have about migrant remittances:

Low-income, self-employed workers in Latin America and the Caribbean have been out of the spotlight of pension funds and the institutions that promote retirement savings. But now there are new initiatives that aim to change this. A story to analyze at Foromic in Santiago, Chile.

There has been much conversation in recent months about the effective shut down of remittance services to Somalia from key sending markets such as the United Kingdom, United States and Australia. Somalia receives more than $1.3 billion in remittances a year, representing at least a quarter its GDP and far outweighing international aid. However, fears surrounding money laundering and terrorism financing have led banks to determine that holding remittance service provider accounts is simply too much of a risk, leading bank partners to drop their accounts until there were simply none left. Humanitarian workers fear that these moves will destroy the vital lifelines that keep many Somali families afloat. If remittances hold equal importance in some Latin American economies, should stakeholders fear that this trend could spread to our region?

By Tomas Miller and Maria Luisa Hayem 

Headlines about international remittances—money sent by migrants to their countries of origin—often focus on amounts. In 2014, for example, remittances received in Latin America and the Caribbean managed to surpass the record high set in 2008, reaching $65.4 billion. But beyond their amount, remittances are an important tool for financial inclusion in Latin America and the Caribbean. We at the Multilateral Investment Fund have been working on the issue of remittances for 13 years. In that time, we have seen significant progress on many fronts, including: reductions in the cost of sending payments; the use of technologies such as the Internet and mobile phones to facilitate sending and receiving; and more efficient distribution through the growing number of points of service for receiving remittances, such as agent banking.

When was the last time your bank let you know how much they valued your time? Better yet, when was the last time they proved it to you? For most of us, waiting in line is just a part of life. Applying for a loan? Get in line. Picking up a remittance? The line starts here. Right? Not necessarily. Last week in the city of Luque, Paraguay, I had the chance to tour a new model of bank branch that is trying to reinvent the customer experience.