Sections:

Press Release

13 November 2006

Money sent home to poor countries hits all time high, new technology offers potential for further growth

Today, the UK will host an international conference on how to make it cheaper and easier for relatives to send money back home to their families in poorer countries. The meeting, to be chaired by the World Bank and the UK’s Department for International Development (DFID), will include speakers from MasterCard, Visa, Citigroup as well as heads of central banks in Africa and Latin America who will discuss how new technologies such as mobile phones can boost the flow of money around the world and reduce financial exclusion.

Gareth Thomas, UK Minister for International Development, who will be speaking at the event, said:

“Sending money home to poor relatives is transforming the lives of millions of people by helping to put children through school, buy medical treatment and creating new jobs. But it is hard for people in remote parts of Africa to get money quickly and cheaply.

“There is a major development and business opportunity to expand the use of new low-cost technology such as mobile phones, which are already popular in Africa, so the poorest can get access to their money more easily. The UK is hosting the conference to bring governments, companies and banks together so we can make these small amounts of money work better for the poor.”

Jorge Familiar, Executive Director of the World Bank, who will be speaking at the opening session of the conference, said:

“From a development perspective, one of the major challenges for policy-makers, the private sector, and the international community is to leverage the growing volume of remittance flows to provide access to financial services to millions of poor people and, thus, contribute to reduce poverty and promote economic growth. By bringing millions of poor people into the financial system, countries can grant their citizens the opportunity to save, build their assets, and smooth their consumption.”

According to the World Bank, remittances are the largest source of external finance for developing countries, exceeding the amount they receive in foreign direct investment or foreign aid every year. In 2006, the World Bank expects remittance flows to developing countries will surpass $200 billion dollars for the first time.

Despite substantial growth in international remittances, on average only 25 percent of adults in developing countries have access to basic financial services such as a bank account. Research shows that a large number of remittances are sent on a personal cash to cash basis with family members taking extra cash to give their relatives when going on holiday. This has tended to limit the impact remittances can have on improving the lives of the poor.

By bringing poor people into the financial system, countries can give their citizens the chance to save for the future, better manage adversity and risks through insurance and pensions and buy goods and services more easily. Moreover, new business horizons can be opened up for entrepreneurs in developing countries.

Back to topBack to top

The aim of the second International Conference on Migrants Remittances is to provide a global forum to share ideas and international experience on the best ways to improve the impact of remittances on eliminating world poverty. The main objectives are:

  • To discuss innovative solutions to make new technologies and existing distribution networks, such as mobile phones, post offices and retail stores, more widely available so they can provide money transfer and other financial services to low-income households. The Conference aims to establish a global dialogue on how remittances can draw people into regulated financial systems and what decision-makers, the private sector, and the international community need to do to make it happen.
  • To provide a platform to present and disseminate the new General Principles for International Remittance Services. These new principles were prepared by an international task force led by the Bank for International Settlements and the World Bank in response to calls by the group of G7 developed countries and the international community. They are the basis for a sound plan to guide authorities in setting up efficient remittance payment systems, promoting competition, enhancing consumer protection, and establishing adequate regulation of money transfer companies.
  • To generate new ideas and practical solutions to maximize the developmental impact of remittances in developing countries, while exploring how government and private companies can work better together to broaden access to finance in developing countries.

DFID has contributed £900,000 to a joint project with Vodafone to develop, pilot and launch a mobile-banking solution in Kenya through their subsidiary Safaricom. DFID is also working with the World Bank and others to address regulatory constraints, such as competition issues and consumer protection, which is preventing greater use of mobile banking to send money.

The World Bank also commits significant resources to work with policy makers and the private sector to promote sound policies and an investment-friendly climate for remittances and access to finance. Specific remittances work at the World Bank includes:

  • Leveraging on remittance in building inclusive financial systems
  • Improving and disseminating data and knowledge on the remittance industry through global, regional and bilateral studies
  • Supporting the modernisation of financial systems infrastructure (payments systems, credit information, and so on.), and
  • promoting a balanced approach to financial integrity and provision of services for the financially underserved.

Back to topBack to top

Notes to editors

1. The conference will be held on 13-14 November at County Hall in London. Spaces are limited and media wishing to attend should contact Kamil Borowik, at The World Bank on US Mobile 1(202) 203 0095. Mr Borowik is in London for the conference.

2. There is growing consensus that mobile-banking offers a unique opportunity to extend banking services to the poor - including the ability to send and receive remittances. There are more than twice as many people with mobile phones than have a bank account in Africa and the number is growing fast - African mobile phone subscribers grew from 7.5 million to 76.8 million from 1999 to 2004 (International Telecommunications Union 2005), and this will further increase to 250 million in the next four years, according to the Progressive Policy Institute.

3. Speakers’ presentations and proceedings from the Event will be available at the Conference website atExternal linkwww.financelearning.org/remittances2006.

4. The conference brings together 150 participants, including senior policy-makers from development and developing countries, financial regulators, academics, money transfer operators, commercial banks, other non-bank financial service providers, representatives of the international donor community and international organisations.

Speakers will include:

  • Emmanuel Tumusiime Mutebile, Governor, Bank of Uganda
  • Manish Misra, Head, Global Remittances ICICI Bank, India
  • Santiago Ribadeneira, President, Banco Solidario, Ecuador
  • Gareth Thomas, Minister for International Development, United Kingdom
  • María Concepción Patiño, Head, Financial Intelligence Unit of Mexico
  • Donald Terry, Manager, Multilateral Investment Fund, Inter-American Development Bank
  • Manuel Orozco, The Inter-American Dialogue
  • Margaret Reid, Senior Vice President, Visa International
  • Sandra Reilly, Managing Director, Citigroup Global Microfinance
  • Carlos Serrano, Director General, Federal Housing Bank of Mexico
  • David Landsman, Executive Director, National Money Transmitters Association, U.S.A.

Contact at the World Bank:

José De Luna Martínez, Senior Financial Economist, The World Bank, 1818 H Street, NW, Washington, DC, 20433 USA
Tel: +1 (202) 458 0367, Fax +1 (202) 522 3199
Email: jdelunamartinez@worldbank.org 

Contact at DFID:

Yasser Mehmood, DFID Press Office, 1 Palace Street, London, SW1E 5HE, Tel: 00 44 20 723 0620, Fax: 00 44 20 7023 0523
Email: y-mehmood@dfid.gov.uk

For further information, contact DFID Press Office on 020 7023 0600, e-mail pressoffice@dfid.gov.uk or call our Public Enquiries Point on 0845 300 4100.

Useful links