Author: Mercedes Benavides, 2006

Commercial banks are aggressively developing strategies to move into the microfinance sector in a way that truly serves the needs of underserved people, especially microentrepreneurs. One of these needs is for products and services linked to remittances that enable immigrants working abroad to send money swiftly and securely to relatives back home – and that offer the receivers alternatives for the productive use of the remittances.

Remittances are critical to the lives of millions of people in developing countries. Nearly 200 million people live outside their home countries,1 and estimates of official remittances to the developing world now total USD 93 billion per year, making them the second most important resource of external funding in developing countries,2 ahead of capital market flows and external funding for developing countries.3 Remittance products, therefore, are an important part of the range of products and services – including credit, savings and insurance – that financial institutions are beginning to offer to the immigrant population.

WWB Innovation Briefs were a series of publications that highlighted the innovative approaches in microfinance products and services of Women’s World Banking’s network members and other industry players, updating the industry on current global innovations and microfinance practices. Our goal in disseminating the latest information and market insights was to make an impact on the industry by highlighting strategies that the members of the wider WWB network and the industry as a whole were developing to address the needs of low-income entrepreneurs.