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There is more to the story of remittances, the money that migrants send home, than there used to be. The sheer volume of remittances has captured the attention of financial markets, governments, and private actors who are exploring innovative ways to leverage the flow of money. Today alongside of the billions that individuals send to their families, hundreds of U.S. migrant associations pool their money and remit it to their home community. No longer are these remittances hand carried; international financial institutions electronically transfer the funds.
The newer features of remittances are truly thought provoking. For if the bulk of remittances still flows between individual family members, the received wisdom that individual remittances play little role in economic development has been turned on its head. Further, migrants in the U.S. who remit as a group concentrate the value of remittances for large scale projects that individual remittances rarely support. New players in the marketplace and in development projects mean new opportunities to increase the value of remittances. For the first time it appears that measured steps can be taken to improve the yield on remittances both for individuals, as well as for the communities that receive remittances.
These findings are the result of a two-year project undertaken by the Tomas Rivera Policy Institute (TRPI) and the Inter-American Dialogue (IAD) with funding from the Ford Foundation. It involved a thorough review of the most recent literature, most of it not yet in academic journals. Original statistical research was carried out using special surveys. Fieldwork was undertaken in the United States, as well as Mexico and Central America, And experts were consulted across the spectrum, from financial service providers, to government officials, to migrants and representatives of migrant associations. Most of the material presented here evolved from those efforts (see Lowell and de la Garza 2000).
SENDING MONEY SOUTH
A 1998 marketing study of Latino households, inclusive of immigrants and natives, found that 26 percent remit and that the proportion of remitters has increased from 1994 through 2000 (Strategy Research Corporation 1998). Latinos in Houston were the most likely (34%) and Latinos in the Lower Rio Grande Valley of Texas were the least likely (5%). Among households that send money, the average is $221 monthly (about $2,652...