remittances & postal networks
DESCRIPTION
Presentation by Robert Meins, remittances specialist at IFAD on May 06 2010 at the EuroGiro meeting in RomeTRANSCRIPT
Financing Facility for RemittancesInternational Fund for Agricultural Development (IFAD)
REMITTANCES & POSTAL NETWORKS
EUROGIRO, ROME MAY 6TH 2010
Robert W. Meins
Remittances SpecialistFinancing Facility for RemittancesInternational Fund for Agricultural Development
Financing Facility for RemittancesInternational Fund for Agricultural Development (IFAD)
The challenge:Remittances to rural areas
Financing Facility for RemittancesInternational Fund for Agricultural Development (IFAD)
A transfer of $200 is sent from the UK to Kuyunga, Uganda, 50 kilometers from the capital Kampala.
The sender has two options:
1) Send directly to Kuyunga using Western Union.
2) Send to a competing firm in Kampala.
Kayunga
Kampala
Financing Facility for RemittancesInternational Fund for Agricultural Development (IFAD)
Kayunga
Remitter sends $ 200,-
- Transfer fees $40.00
- Exchange rate margin 1.28 %
- Fees on the receiving side
$0
Actual amount received in Kayunga
$ 157.44 (21.28%)
Picking up remittances in rural areas:
Remitter sends $ 200,-
- Transfer fees $19.03
- Exchange rate margin 1.15 %
- Fees on the receiving side
$0
Actual amount received in Kampala
$ 176.68 (11.66%)
Kampala
Financing Facility for RemittancesInternational Fund for Agricultural Development (IFAD)
The financial crisis &Remittances in 2010
Financing Facility for RemittancesInternational Fund for Agricultural Development (IFAD)
Kaza
chst
an
Mold
ova
Guin
ea
Uganda
Venezu
ela
Arm
enia
Turk
ey
Leso
tho
Bra
zil
Pola
nd
Egypt
Cost
a R
ica
Ukra
ine
Georg
ia
Mexic
o
Nig
eri
a
Moro
cco
Colo
mbia
India
Ecu
ador
Jam
aic
a
Alb
ania
Hondura
s
Guate
mala
Uru
guay
El Salv
ador
Bolivia
Cape V
erd
e
Eth
iopia
Indonesi
a
Nic
ara
gua
Dom
inic
an R
epublic
Jord
an
Peru
Para
guay
Kenya
Philip
pin
es
Guin
ea-B
issa
u
Sw
azi
land
Mauri
tius
Bangla
desh
Pakis
tan
-50%
-40%
-30%
-20%
-10%
0%
10%
20%
30%
Impact of the financial crisis:Remittance growth in 2009 YTD:
Source: Most recent reporting from Central BanksSource: Most recent reporting from Central Banks
Financing Facility for RemittancesInternational Fund for Agricultural Development (IFAD)
Colo
mbia
Mexic
o
Bra
zil
Kenya
Guate
mala
Hondura
s
Nic
ara
gua
Arm
enia
Para
guay
Pakis
tan
El Salv
ador
Jam
aic
a
Turk
ey
Dom
inic
an R
epublic
Philip
pin
es
Bangla
desh
Georg
ia
-50%
-40%
-30%
-20%
-10%
0%
10%
20%
30%
Impact of the financial crisis:Remittance growth in 2010 YTD:
Source: Most recent reporting from Central BanksSource: Most recent reporting from Central Banks
Financing Facility for RemittancesInternational Fund for Agricultural Development (IFAD)
The Financing Facility for Remittances (FFR)
Financing Facility for RemittancesInternational Fund for Agricultural Development (IFAD)
The Facility… $18 million dollar multi-donor fund
Consultative Group for Assistance to the Poor European Commission Government Luxembourg Government Spain Inter-American Development Bank UN Capital Development Fund, and Housed at the International Fund for Agricultural
Development
FFR manages 40 projects in 38 countries around the globe
Open to private, public and civil society organizations
Financing Facility for RemittancesInternational Fund for Agricultural Development (IFAD)
What we do… Annual Calls for Proposals Global Forum on Remittances “Sending Money Home” series of studies RemittancesGateway.org portal Dissemination
European Parliament G8 Working group on remittances Global Forum on Migration & Development Conferences
Financing Facility for RemittancesInternational Fund for Agricultural Development (IFAD)
Why we do it…
Lower the cost of remittances through competition
Improve capillarity, service rural areas Broaden the scope of financial services Bank the unbanked
… to empower migrant workers and their families to advance on the road to financial independence.
Financing Facility for RemittancesInternational Fund for Agricultural Development (IFAD)
FFR’s approach to reaching rural areas
Financing Facility for RemittancesInternational Fund for Agricultural Development (IFAD)
3 ways FFR seeks to increase “capillarity”
Microfinance (networks)
Mobile financial services
Postal networks
Financing Facility for RemittancesInternational Fund for Agricultural Development (IFAD)
Postal networks’ importance to remittances 657,000 post offices in 191 countries 500,000 in rural areas
80% of designated postal operators provide some sort of financial services
1,15 billion money orders sent by Posts worldwide in 2007
Source: UPU
Financing Facility for RemittancesInternational Fund for Agricultural Development (IFAD)
UPU-IFAD project in West Africa
Total number of inhabitants: 43.5 million
Number in rural areas: 28.7 million
Service unavailable in rural areas, where other money transfer companies are absent
Necessity to extend that action in rural areas: answer to the 2007 Call for Proposals
In 2008: approval of the project, launch in September 2008
Financing Facility for RemittancesInternational Fund for Agricultural Development (IFAD)
UPU-IFAD project in West Africa
Target: migrants and recipients of remittances in rural areas of 6 West African countries: Benin, Burkina Faso, Mali, Mauritania, Niger, and Senegal
Main activities: Connection of 273 rural post offices in 6 countries Set up of the communication infrastructure (call centres,
direct connection) New technology, equipment, training Cash is available in rural post offices – transportation and
management Associate remittances with other financial services (account-
based services, microfinance)
Financing Facility for RemittancesInternational Fund for Agricultural Development (IFAD)
Benefits
Low-cost and quality service available in rural areas
Reduction of competitors tariffs on various corridors
Reinforcement of rural Posts for provision of universal service
First step in financial inclusion process for rural poor
Financing Facility for RemittancesInternational Fund for Agricultural Development (IFAD)
Results to date
IT, commercial and Operational Model updated on the basis of new UPU Regulations and regional conditions
New equipment installed and tested 14 October 2009: connection of rural postal
offices and opening of electronic remittances services
Training and cooperation Low-cost and quality service available in rural
areas
Financing Facility for RemittancesInternational Fund for Agricultural Development (IFAD)
Financing Facility for RemittancesInternational Fund for Agricultural Development (IFAD)
2010 Call for Proposals
Financing Facility for RemittancesInternational Fund for Agricultural Development (IFAD)
2010 Call for proposals
Grant financing for projects related to maximizing the development impact of remittances
up to $250,000 for projects
up to $500,000 for mobile financial services
Financing Facility for RemittancesInternational Fund for Agricultural Development (IFAD)
Topic areas
Mobile financial services
Housing
Postal networks (Micro-) Insurance
Microfinance networks Migrant pensions and other government-to-person payments
Financial services innovations
Securitization
Migrant entrepreneurship and investment (funds)
Open window (innovative projects in other areas)
Financing Facility for RemittancesInternational Fund for Agricultural Development (IFAD)
Basic information
Who can apply? Private sector Public sector Civil society
Cross-sector partnerships encouraged Execution period: 2 years Deadline (short) concept proposals: June
7th 2010
Financing Facility for RemittancesInternational Fund for Agricultural Development (IFAD)
Must have Legal status in country where you operate Audited financial statements
Act on behalf of themselves (not as an intermediary)
Provide counterpart 10-30% non-profit 50% for for-profit (minimum half of which in
cash) Project must be in IFAD member countries
Financing Facility for RemittancesInternational Fund for Agricultural Development (IFAD)
Tunis recommendations
Increase competition
Empower market actors
Achieve effective and efficient
regulation
Adopt new technologies
Expand access to financial services
Make more financial services available in
rural areas
Financing Facility for RemittancesInternational Fund for Agricultural Development (IFAD)
RemittancesGateway.org
Institutionally neutral platform
Documents News Events Country profiles
All are welcome to contribute
Financing Facility for RemittancesInternational Fund for Agricultural Development (IFAD)
QUESTIONS & ANSWERS
Financing Facility for RemittancesInternational Fund for Agricultural Development (IFAD)
Contact information…
Robert W. [email protected]+39 06 5459 2059
www.ifad.org/remittanceswww.remittancesgateway.org