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Remittances & postal networks

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Presentation by Robert Meins, remittances specialist at IFAD on May 06 2010 at the EuroGiro meeting in Rome

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Remittances & postal networks

  1. 1. Financing Facility for Remittances International Fund for Agricultural Development (IFAD) Robert W. Meins Remittances Specialist Financing Facility for Remittances International Fund for Agricultural Development
  2. 2. Financing Facility for Remittances International Fund for Agricultural Development (IFAD)
  3. 3. Financing Facility for Remittances International 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
  4. 4. Financing Facility for Remittances International 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%) 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
  5. 5. Financing Facility for Remittances International Fund for Agricultural Development (IFAD)
  6. 6. Financing Facility for Remittances International Fund for Agricultural Development (IFAD) -50% -40% -30% -20% -10% 0% 10% 20% 30% Kazachstan Moldova Guinea Uganda Venezuela Armenia Turkey Lesotho Brazil Poland Egypt CostaRica Ukraine Georgia Mexico Nigeria Morocco Colombia India Ecuador Jamaica Albania Honduras Guatemala Uruguay ElSalvador Bolivia CapeVerde Ethiopia Indonesia Nicaragua DominicanRepublic Jordan Peru Paraguay Kenya Philippines Guinea-Bissau Swaziland Mauritius Bangladesh Pakistan Impact of the financial crisis: Remittance growth in 2009YTD: Source: Most recent reporting from Central BanksSource: Most recent reporting from Central Banks
  7. 7. Financing Facility for Remittances International Fund for Agricultural Development (IFAD) -50% -40% -30% -20% -10% 0% 10% 20% 30% Colombia Mexico Brazil Kenya Guatemala Honduras Nicaragua Armenia Paraguay Pakistan ElSalvador Jamaica Turkey DominicanRepublic Philippines Bangladesh Georgia Impact of the financial crisis: Remittance growth in 2010YTD: Source: Most recent reporting from Central BanksSource: Most recent reporting from Central Banks
  8. 8. Financing Facility for Remittances International Fund for Agricultural Development (IFAD)
  9. 9. Financing Facility for Remittances International Fund for Agricultural Development (IFAD)  $18 million dollar multi-donor fund  ConsultativeGroup 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
  10. 10. Financing Facility for Remittances International Fund for Agricultural Development (IFAD)  Annual Calls for Proposals  Global Forum on Remittances  “Sending Money Home” series of studies  RemittancesGateway.org portal  Dissemination  European Parliament  G8Working group on remittances  Global Forum on Migration & Development  Conferences
  11. 11. Financing Facility for Remittances International Fund for Agricultural Development (IFAD)  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.
  12. 12. Financing Facility for Remittances International Fund for Agricultural Development (IFAD)
  13. 13. Financing Facility for Remittances International Fund for Agricultural Development (IFAD) Microfinance (networks) Mobile financial services Postal networks
  14. 14. Financing Facility for Remittances International Fund for Agricultural Development (IFAD)  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
  15. 15. Financing Facility for Remittances International Fund for Agricultural Development (IFAD)  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
  16. 16. Financing Facility for Remittances International Fund for Agricultural Development (IFAD)  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)
  17. 17. Financing Facility for Remittances International Fund for Agricultural Development (IFAD)  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
  18. 18. Financing Facility for Remittances International Fund for Agricultural Development (IFAD)  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
  19. 19. Financing Facility for Remittances International Fund for Agricultural Development (IFAD)
  20. 20. Financing Facility for Remittances International Fund for Agricultural Development (IFAD)
  21. 21. Financing Facility for Remittances International Fund for Agricultural Development (IFAD)  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
  22. 22. Financing Facility for Remittances International Fund for Agricultural Development (IFAD) 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)
  23. 23. Financing Facility for Remittances International Fund for Agricultural Development (IFAD)  Who can apply?  Private sector  Public sector  Civil society  Cross-sector partnerships encouraged  Execution period: 2 years  Deadline (short) concept proposals: June 7th 2010
  24. 24. Financing Facility for Remittances International 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
  25. 25. Financing Facility for Remittances International Fund for Agricultural Development (IFAD)  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
  26. 26. Financing Facility for Remittances International Fund for Agricultural Development (IFAD)  Institutionally neutral platform  Documents  News  Events  Country profiles  All are welcome to contribute
  27. 27. Financing Facility for Remittances International Fund for Agricultural Development (IFAD)
  28. 28. Financing Facility for Remittances International Fund for Agricultural Development (IFAD) Robert W. Meins R.Meins@ifad.org +39 06 5459 2059 www.ifad.org/remittances www.remittancesgateway.org

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