The Role of Remittances in Leveraging Sustainable Development in Latin America and the Caribbean

This paper describes ACCIONs work in the international remittances industry. ACCION has been active in the remittances field since 2002, and has carried out market research to understand the financial needs of senders and recipients. Its efforts in the field include:

• Developing financial products that complement remittances along with banks and MFIs;
• Helping banks and MFIs establish partnerships with money transfer companies;
• Developing financial literacy tools to help recipients make informed decisions.

ACCIONs research has identified a “remittances life cycle” that influences the size, frequency and potential use of remittance flows. Savings accounts, home improvement loans and insurance are the most relevant products for remittance receivers and senders. ACCION encountered challenges in understanding the market, dealing with fears and barriers to using banks, and the legal framework. Finally, the paper suggests the following policy recommendations:

• Promote mechanisms that allow convenient movement of funds;
• Encourage a competitive setting;
• Remove barriers hindering access of senders to banking services;
• Support expansion of financial services to recipient families;
• Increase financial literacy among senders and receivers.