Cheap money to Mexico
This extract from the Stanford Social Education Review is a nice overview of microfinance in action in Mexico. One idea: allowing migrant workers to transfer money directly to ATM cards of their relatives back home. The real point, of course, is that it doesn't matter how you do it as long as the transaction costs keep coming down.
In one of our scenarios on 'The Future of Aid', Michael Klein, Klaus Tilmes and I argued that simply by reducing the costs of money transfer, more money would flow to developing countries than flows through IDA, the concessional finance arm of the World Bank.
Update: See this WB report on the potential of remittances, or more from MicroCapital on money transfers to Latin America.
Comments (3)
Bookmark
E-mail
Facebook
Don't some immigrants already have this ability? I have worked in construction here in the Washington D.C. area for about half a year, and it was my understanding that although undocumented immigrants could not open new accounts in American banks, they could deposit money into accounts held in banks from thier home countries with branches in the states. El Salvadorian, Guatemalan, and Houndoran Banks all have branches in the D.C. area. I imgaine they are already permitting their clients to make deposits directly to family members with atm cards. Is my perception of the current reality correct?
I think one way to reduce the cost of transmitting money from the U.S to Central America and other parts of the developing world would be to grant some sort of formal immigration status to undocumented immigrants. This would allow more banks to compete for them as clients, and probably reduce rates for remittances.
Posted by: Ed O. | Nov 24, 2005 12:54:18 PM
Ed: The Washington D.C. area and its very large Salvadorian population is a very interesting case.
For example, many of the Salvadorians that work in Washington D.C. have a special political refugee status or have a work permit status known as "Temporary Protected Status" which allows them to enact financial transactions that other groups are unable to. For more on the TPS program see: http://www.washingtonpost.com/wp-dyn/articles/A59873-2005Jan8.html.
The Washington Post has been very active in covering the opening of Salvadorean-geard banks and money-transfer firms in the DC area. For example:
"Salvadoran Bank Expands Network of Transfer Offices," http://www.washingtonpost.com/wp-dyn/content/article/2005/10/27/AR2005102702211.html
"El Salvador Courts Emigrant Investment," http://www.washingtonpost.com/wp-dyn/content/article/2005/08/12/AR2005081201781.html
"A Bid to Cuts Cost Of Money Transfers For Immigrants," http://www.washingtonpost.com/wp-dyn/articles/A18876-2004Nov28.html
Posted by: Pablo Halkyard | Nov 25, 2005 1:36:57 AM
We think why chinese government didn't care many people in China very poor, they didn't have enough education,work,hospital and other. So why chinese the have the right to open their businese in Africa and other contry. They did not developing across in china yet. Maybe they a mistake to growth other contry be a better businese.
Posted by: Peter Yang | Oct 6, 2007 12:28:19 AM