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Remittances – what are the opportunities for clients and institutions?

Remittances – what are the opportunities for clients and institutions? Opening presentation Remittances Officially recorded remittance flows to developing countries reached $316 billion in 2009. The true size is believed to be larger

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Remittances – what are the opportunities for clients and institutions?

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  1. Remittances – what are the opportunities for clients and institutions? Opening presentation

  2. Remittances Officially recorded remittance flows to developing countries reached $316 billion in 2009. The true size is believed to be larger

  3. Top 20 recipients of migrant remittances (% of GDP, 2008) (WB)

  4. How is it being used? Up to 90 per cent is spent on basic necessities

  5. How is it being used? From 30 to 40 per cent of remittances are sent to rural areas (up to 70% in Tajikistan)

  6. How is it being used? The share of remittances in total income of receiving households is high (30-70%)

  7. An important feature… Immediate encashment

  8. Access to broad financial services • Recipients with Bank Accounts (%) LIMITED: a small percentage have bank accounts, savings accounts, or access to credits or other financial services. Source: Orozco, Manuel. EBRD 2007; and Survey on remittance transfers to Armenia.

  9. Financial services needed • Sender: a fast, efficient, competitive and secure financial system • Recipient: access to deposit accounts, to save, build credit histories and invest in their future. However: • “…Financial intermediation is limited to processing remittance transfers but not to transforming senders and recipients into financial asset builders” (ADB)

  10. Current experiences • What is done? • Benefits for client? • Benefits for financial institution?

  11. Conclusions • Importance of financial education in transforming remittance owners into asset builders • Right combination of appropriate products and financial education is the key • Sustainable models can be developed with integration of innovative solutions into daily activities

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