The document discusses the work of FOMIN, a development organization that promotes financial inclusion in Latin America and the Caribbean. It focuses on FOMIN's efforts to link international remittances received by individuals in the region to savings opportunities. FOMIN has published a framework to guide financial institutions in designing savings products for remittance clients. It is funding 10 projects through its Remittances and Savings Program that will develop savings products, financial education strategies, and testing of new distribution channels to offer savings accounts to remittance recipients, with the goal of helping more people in the region save money and build assets.

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FROM REMITTANCES TO SAVINGS
Tomás Miller, Access to Finance Unit Chief, FOMIN
Global Forum on Remittances and Development
Milan, Italy, June 18, 2015

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 Background
 Member of the Inter-American Development Bank Group
 Established in 1992
 Funded by 39 Country Donors
 Objectives
 Promote entrepreneurship, economic opportunity, and financial
inclusion in Latin America and the Caribbean
 Innovate, pioneer and pilot private sector solutions for empowering
low-income population
 Identifying successful interventions and models
 Helping others in the private and public sectors take them to scale
 Our vehicles
 Equity Investment
 Loans
 Grants
 Access Areas
 Finance
 Markets
 Basic Services
ABOUT US

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 Market information. Annual
remittance reports, market research,
capacity building to collect and
publish information
 Market Environment. Analysis and
technical assistance on legal and
regulatory framework
 Business Models. Remittances and
financial inclusion projects, with an
emphasis on savings
FOMIN’S REMITTANCES WORK

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REMITTANCES AND SAVINGS APPROACH
 40 million LAC remittance clients sent and/or
received a total of $65.4 billion (2014)
 Majority of remittances paid in cash and channeled
into consumption
 Still, 48.6% of adults in LAC do not have a savings or
checking account
 Opportunity to reduce economic vulnerability of
remittances senders and recipients and increase
client base of financial institutions.
 MIF published a practical framework for our
approach which is available on our website for
institutions to use as a guide (available in English and
in Spanish) Inclusive Savings for Remittance
Clients: A Practical Framework
Burgess. December 2014.

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REMITTANCES AND SAVINGS APPROACH
Design products
Understand
clients’ financial
lives
Build access Diversify revenue
Involve communities and
social networks
Help clients set concrete
savings goals
Increase customers’ access
to deposit and withdrawal s
Set account pricing with
clients’ income and
behavior in mind
Label products to reflect
clients’ mental accounting
Provide financial education,
linked to actionable ways to
save
Open savings accounts
remotely, not just in
branches
Cross-sell insurance and
credit products
Send reminders and
communicate with clients
regularly
Integrate budgeting tools
into account services to
improve short-term money
management
Improve merchant
acceptance of non-cash
transactions
Look to remittance senders
for new markets
Automate savings behavior
Offer rewards and make
savings fun

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 Objective. Promote the development and
implementation of business strategies, including
the design of liquid and planned savings products,
targeted to remittance clients.
 Projects. The Program will co-finance at least 10
projects
 Activities eligible for funding.
- Design or adjustment of savings products;
- Promotion and financial education strategies; and
- Testing of new distribution channels to offer
savings products.
 Technical assistance.
- The Program provides up to US$500k in grant
assistance per project
REMITTANCES AND SAVINGS PROGRAM

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PROJECTS APPROVED TO DATE
Country Paraguay
Approval Date December 2013
Beneficiaries 27,750 direct beneficiaries
Executing Agency Visión Banco S.A.E.C.A.
Country Honduras
Approval Date July 2014
Beneficiaries 20,000 direct beneficiaries
Executing Agency Red Katalysis
Country Haiti
Approval Date December 2014
Beneficiaries 13,800 direct beneficiaries
Executing Agency Federation Le Levier
Country Dominican Republic
Approval Date
October 2011 (prior to
facility)
Beneficiaries 94,000 direct beneficiaries
Executing Agency Banco Unión S.A.

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LESSONS LEARNED
 Financial inclusion of remittances clients, has to be accompanied by the development
of an enabling legal and regulatory framework that promotes private sector
innovation.
- Legal and regulatory framework in this area should take into account the needs of
the lowest income populations and find a balance between the objective of financial
inclusion and the stability of the financial system.
 Access to reliable and updated remittances data can help private sector understand
market’s dynamics and inform investment and operational decision-making within the
private sector
 In order to promote savings of remittances clients it is necessary to bring remittance’s
payments closer to this population and have the appropriate infrastructure to
undertake cash- in and cash-out transactions (Ex. Agent banking).
 Technology, including mobile and internet, represent an opportunity to reduce costs
of receiving the remittance and accumulate assets.
 Financial education is key. Savings’ habits should be created since early stages and
efforts by public and private sector are needed.

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