Remittances & postal networks

Financing Facility for Remittances
International Fund for Agricultural Development (IFAD)
Robert W. Meins
Remittances Specialist
International Fund for Agricultural Development

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

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

-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

-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

 $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

 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

 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.

Microfinance
(networks)
Mobile
financial services
Postal
networks

 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

 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

 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)

 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

 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

 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

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)

 Who can apply?
 Private sector
 Public sector
 Civil society
 Cross-sector partnerships encouraged
 Execution period: 2 years
 Deadline (short) concept proposals: June 7th 2010

 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

 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

 Institutionally neutral platform
 Documents
 News
 Events
 Country profiles
 All are welcome to contribute

Robert W. Meins
R.Meins@ifad.org
+39 06 5459 2059
www.ifad.org/remittances
www.remittancesgateway.org

Remittances & postal networks

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