At the International Forum on Remittances 2007 in Washington D.C., the Director of UN-INSTRAW, Carmen Moreno, called on representatives of financial institutions to develop socially-oriented services in order to strengthen the impact of remittances in developing countries.
“Financial and banking services alone do not maximize the productive use of remittances at the local level if they don’t include a social component” stated Ms. Moreno during the international event organized by the International Fund for Agricultural Development (IFAD) and the Multilateral Investment Fund (MIF).
Remittances sent by migrants to their countries of origin are usually invested in small business (shops, hair salons, clothing or accessory boutiques) and used for basic consumption (food, healthcare, education, etc.). Consequently, remittances do not always contribute to the extent that they could to a sustainable development for the community as a whole.
“By offering different types of services, banks and other financial institutions can help improve living conditions for women and men in developing countries, including through the creation of training programmes to guide remittance recipients in investment for community development. Moreover, banks and other financial institutions can also initiate programmes to support the establishment of new businesses at the community level”, she continued.
With studies in the Caribbean, Latin America, Europe, South-East Asia and Africa, UN-INSTRAW’s pioneering research on the gender dimensions of remittances for development has demonstrated the significant potential of women’s migration and economic empowerment for household and community well-being and economic growth.
UN-INSTRAW’s case studies show that women’s remittance-based entrepreneurship faces both the same obstacles confronted by men, in addition to other gender-based obstacles, including lower levels of literacy and educational and less access to financial services. Furthermore, because women tend to spend a higher proportion of remittances on household consumption and well-being, they investments in the community are usually very small.
“The majority of services offered by financial institutions do not take these gender-based obstacles into account,” stated Moreno. “Services that are specifically targeted to both female and male recipients of remittances can maximize their impact on community development and well-being,” she continued.
Remittance flows –both recorded and unrecorded— are now more than double the amount of official development aid received by developing countries, as well as the largest source of external financing for many of them. There are almost 94 million female migrants worldwide. At the global level, women represent half of the migrant population, and in some countries account for 70% to 80% of the total. The 191 million migrants throughout the world sent a total of US$232 billion in remittances during 2005.
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