English

Financing Facility for Remittances
Promoting innovative remittance markets and
empowering migrant workers and their families
The Facility
Guiding principles
In 2013, migrant workers worldwide will send home an estimated US$450 billion
Rural remittances
to family members in developing countries. These funds, known as remittances,
Around 40 per cent of total remittances
provide for basic necessities such as food, clothing and shelter that are essential
go to rural areas, where they have a
to lifting millions of people out of poverty. The truly transformative potential of
much greater impact than in urban
these funds, however, lies in their investment in education, health care and small
centres. Rural areas are traditionally
businesses. The Financing Facility for Remittances (FFR) is a multi-donor facility,
prone to domestic migration, which
administered by the International Fund for Agricultural Development (IFAD), a
makes the sizeable inflow of
specialized agency of the United Nations dedicated to the eradication of rural
remittances that stimulates local
poverty. The FFR has been working since 2006 with the goal of increasing the
commerce and creates new livelihoods
development impact of remittances and enabling poor rural households to
in rural communities even more
advance on the road to financial independence.
important. The FFR provides the link
The FFR cofinances development projects in close collaboration with public, private
and civil society partners. Furthermore, it acts as an information broker to facilitate
the dissemination, replication and scaling up of remittance-related best practices.
Through the contributions of its members – comprised of donor countries and
institutions – the US$28 million Facility has initiated almost 50 projects in more
than 40 countries throughout the developing world. These projects focus on three
core objectives:
1. Promote access to remittances in rural areas
2. Link remittances to rural financial services and products
3. Develop innovative and productive rural investment opportunities for
migrants and community-based organizations
between remittances and rural
development.
Promoting innovation
Innovation is at the core of all FFR
activities: at both the operational and
policy levels, innovative solutions have
been used to reduce the cost of
remittance transfers and broaden the
geographic outreach of financial services.
The Facility supports entrepreneurial
approaches, as evidenced by projects
FFR members are actively engaged in the decision-making process at key points.
utilizing mobile banking technology
Members share their technical expertise and competency, allowing for cross-
and postal networks, in addition to a
learning and knowledge-sharing of best practices from FFR projects worldwide.
variety of savings, loan, housing and
insurance products.
The members of the FFR are as follows:
• Consultative Group to Assist the Poor (CGAP)
Partnerships for success
• European Commission (EC)
The FFR cofinances new and
• Government of Luxembourg
sustainable initiatives with partners
• Ministry of Foreign Affairs and Cooperation of Spain (MAE)
throughout the public, private, and civil
• Multilateral Investment Fund (MIF) of the Inter-American Development Bank (IDB)
society sectors. These institutions are
• The World Bank
typically microfinance institutions,
• United Nations Capital Development Fund (UNCDF)
credit unions, NGOs and international
• International Fund for Agricultural Development (IFAD)
money transfer operators, but also
In conjunction with its operational activities, the Facility fosters strategic
commercial banks, cooperative banks
cooperation among governments, international development institutions and
and local financial service providers.
leading organizations in the field of migrant remittances. As one of the leading
actors dealing with migration and development, the FFR also actively contributes
its experiences to the G20 Working Group on Remittances and to the Global
Forum on Migration and Development, among others.
In short, the Facility works to empower migrant workers and their families to
overcome the need to migrate.
2
Where we innovate
The FFR concentrates its efforts on five focus areas which are key to leveraging the development impact of remittances.
Each area is subdivided into issues of specific relevance to the Facility’s goals:
1
Market development
• Ground-breaking
research and analysis
Pioneering partnerships
• Partnership-based initiatives
• Joint investment by
2
private, public, and civil
• Regulatory
society actors
advocacy
• Promoting
• Pro-poor,
competition
profitable
business models
Innovative business models
• Expanding microfinance,
postal and mobile networks
3
• Banking the unbanked,
New technologies
• Card-, web- and
mobile-based solutions
4
• Platforms for
financial literacy
data management
and savings
• Technical capacity-
mobilization
building
• Cross-selling
of financial
products
Migrant investment and
entrepreneurship
• Opportunity identification
5
• Productive investment models
• Skill development
and transfer
(financial literacy and
entrepreneurship
support)
3
Portfolio at a glance
FFR’s portfolio includes almost 50 innovative projects in more than 40 countries across the developing world.
The grant financing totals over US$20 million, of which US$10 million consists of contributions from
beneficiaries and partners.
How we mobilize resources
US$20 million
US$10 million
FFR contribution
Total project amount
(FFR contribution and cofinancing
from project partners)
Latin America and
the Caribbean
Bolivia (Plurinational State of)
Colombia
Costa Rica
Ecuador
Haiti
Jamaica
Paraguay
Peru
4
In Paraguay, commercial service
provider Konecta has launched a
technology platform for mobile
In Peru, the Centre for the
Advancement of Women (CEPROM)
supported the development of
integrated financial
services. By simply signing up to
transnational family-run
enterprises, through training and
the service with an ordinary ID, more
than 2,000 Paraguayan remittance
recipients opened a mobile bank
account, and are now managing
their cash transfers or paying their
bills through over 700 enabled
points of sale.
developing integrated business plans
with local governments. CEPROM is
also sensitizing local mayors to the
impact migration is having on their
communities.
Africa
Benin
Burkina Faso
Cameroon
Ethiopia
Ghana
Madagascar
Malawi
Mali
Mauritania
Niger
Senegal
Sierra Leone
Somalia
Uganda
The Cameroon Cooperative Credit
Union League (CamCCUL) has
connected credit union offices
in 24 rural localities with a new
electronic cash transfer
system. The “Telecash” service
has brought down transfer cost by
almost 20 per cent on average, and
reached areas where no other
money transfer system has ever
reached. As a result, connected
credit union offices saw their savings
and loan portfolio grow significantly.
Romanian and Moldovan migrants in
the Veneto region of Italy can now
rely on the special Guarantee
Europe
Albania
Kosovo
Republic
of Moldova
Romania
In Albania and Kosovo, the
International Agency for Source
Country Information (IASCI) has
Fund model for migrant
partnered with Raiffeisen Zentralbank
Österreich (RZB) Group, Austria's third
entrepreneurs launched by
Veneto Lavoro. Would-be
largest commercial bank, as well as
entrepreneurs are assisted by a
microfinance institutions, to reach over
dedicated help desk in developing
1,100 migrants with innovative
their business plans, and are granted financial products. From the
“flexible deposit account” to the
access to new financial products to
“welcome migrants account”, all
finance their business ideas.
products ease migrant re-integration
and increase migrant earnings, in
addition to attracting savings to the
country of origin.
Where we invest
Europe
Asia and
the Pacific
7%
25%
20%
3%
Africa
Latin America and
the Caribbean
Near East and
the Caucasus
45%
In the Philippines, G-Xchange Inc.
expanded their remittance service
system “G-Cash”, which transforms
a mobile phone into a virtual
wallet, enabling rural and urban
remittance beneficiaries to access
their funds in ways that are more
convenient and more economic.
The Atikha Overseas Workers and
Communities Initiative (Atikha) and
the Filipino Women’s Council took a
very realistic approach to
investments mobilizing migrant
Near East and
the Caucasus
Georgia
resources towards agribased cooperatives in the
Asia and the Pacific
Lao People’s
Bangladesh
Democratic Republic
Cambodia
Malaysia
China
Nepal
India
Philippines
Indonesia
Sri Lanka
Kazakhstan
Tajikistan
Kyrgyzstan
Uzbekistan
Viet Nam
In six West African countries, the
Universal Postal Union (UPU)
modernized 355 rural post offices
enabling them to offer their clients
timely remittance transfers at half
the price. Based on the lessons
learned from this initiative, IFAD, in
close cooperation with the World
Bank, UNCDF, UPU and WSBI/ESBG,
initiated an innovative programme
on Postal Financial Services
in Africa, aimed at enhancing
competition in the African remittance
marketplace. This scaled-up
initiative will enable key post offices
in Africa to offer financial services
and to transfer remittances in a way
that is cheaper, more convenient,
safer and more rapid.
In the Gedo region of Somalia,
remittances can now be collected
from local stores in the form of
groceries and other vital
products thanks to a new cash
transfer model created by the
Himilo Relief and Development
Association (HIRDA). In this way,
remittance recipients can pick up
their daily necessities without being
exposed to potential security issues,
while remittance senders have a
greater degree of control over how
their remittances are spent.
Philippines. The provision of financial
literacy training by Atikha in Italy and
the Philippines resulted in more than
900 migrant workers investing either
in existing cooperatives or in small
businesses in their rural
communities in the Philippines. The
SIDC agri-cooperative, provided
migrants a guaranteed 6 per cent
return on their investments.
In Nepal, the Centre for Micro
Finance (CMF) offered training to
local migrant families, as well as a
capacity-building programme that
helped local MFIs improve the
quality of the financial
services they offered. CMF held
more than 50 financial and business
literacy classes, attended by 1,000
migrant worker family members
(mostly women). The approach
adopted by CMF increased the
number of migrant workers obtaining
loans by more than 200 per cent,
and the number of enterprise loans
doubled, creating more than 900
jobs through new investments in
local cooperatives.
5
How the FFR operates
The FFR manages its strategic approach through project
ground and maximize their impact. Extracting key lessons from its
cofinancing, specifically through a multi-faceted approach.
successful pilot projects, the FFR identifies, designs and
On the one hand, the Facility launches calls for innovative and
implements targeted initiatives with national and key partners in
sustainable initiatives as a worldwide, flexible, demand-driven
specific countries with the aim at leveraging successful results.
funding mechanism that cofinances the most innovative and
Besides resulting in a greater outreach, this scaling-up approach
promising initiatives, or pilots, on a competitive basis. Grants
ensures that effective financial mechanisms are likely to stay in
under this mechanism reach up to US$500,000 per project with a
place well beyond project completion date, thereby guaranteeing
maximum implementation period of two years.
project sustainability.
During the call for proposals, interested organizations submit their
Crucial to the project cycle is monitoring and evaluation, with real-
applications through the FFR online submission tool. These are
time adjustment of project performance and enhancement of
then reviewed by the Steering and Investment Committees, which
project impact, both for pilot or large-scale projects. Monitoring
play a central role in selecting and approving project proposals,
and evaluation provides key criteria for the selection of new
guaranteeing the quality of the process by setting out guidelines
project proposals and enriches future project design with best
and contributing to project supervision.
practices and lessons drawn from experience in the field. In this
The second financing mechanism of the FFR addresses larger
way, targeting and procedures in future projects are refined.
programmes in cooperation with IFAD’s regional divisions and
Lessons learned from major project experiences are disseminated
partner organizations, and aims at scaling up successful projects
through publications, events and web tools, thereby promoting
financed under the initial call for proposals. This enables the
the replication, scaling up and scaling out of successful practices
Facility to broaden both the scale of its interventions on the
and approaches.
Project Cycle Scheme
Financing Facility for Remittances
e submission tool
Onlin
Strategic
direction
& guidelines
Launch of call
for proposals
Submission
of proposals
Evaluation
Implementation
and supervision
FFR
Members
Selection and
approval
Knowledge
management
Signing of
agreements
Onlin
Selection and
approval
of proposals
Project
evaluation
FFR
Coordination
Annual workplan
and budget
review
e supervision tool
Scaling up approach
M&E
KM
Lessons
learned
Successful
models
Call for
proposals
Sustainability
Scaled up
Initiative
Pilot
project
Multiple
impact
External
knowledge and
partnerships
Local
impact
INNOVATION
6
LEARNING and APPLYING
SCALING UP
FFR as an information broker
Global Forums on Remittances – conferences
The FFR is the driving force behind the Global Forum on Remittances, a series
of ground-breaking regional and international conferences dedicated to
highlighting the impact of remittances in developing economies. These events
are devoted to the creation of wide-reaching synergies among governments,
civil society and private-sector stakeholders.
Our remittance forums:
• International Forum on Remittances 2007. Remittances as a
Development Tool (in partnership with the Inter-American Development
Bank in Washington, DC)
• Global Forum on Remittances 2009. Remittances as a Development
Tool in Africa (in partnership with the African Development Bank in Tunis)
• Global Forum on Remittances 2013. Remittances as a Development Tool
in Asia and the Pacific (in partnership with the World Bank in Bangkok)
• Future of the Forum: Global Forum on Remittances: Europe
Sending Money Home – publications
In 2007, the FFR’s Sending Money Home report provided the
first-ever estimates of worldwide remittances to the developing
countries. Since then, The FFR periodically releases new studies
under the title Sending Money Home, focusing on central issues
affecting remittances from both a global and regional perspective,
and stressing the impact of remittances in the developing regions
of the world. Sending Money Home provides comparative indicators
to measure the importance of remittances among regions and
subregions, and highlights their potential to stimulate local economic
activity. The studies also deal with regulatory and competitive issues
and developments in financial mediation, as was the case with the
Sending Money Home to Africa and Sending Money Home to Asia
publications of 2009 and 2013, respectively.
RemittancesGateway.org – portal
The RemittancesGateway.org web portal provides a platform for
continuing dialogue among stakeholders. This portal is a one-stop
shop providing the latest news, information, documents and data
from a broad range of institutions and stakeholders on the subject
of remittances. As well as serving as a tool for information exchange
and discussion, the Gateway provides both country-specific and
topic-related information from around the globe.
7
Our project beneficiaries and their partners
AB Bank Ltd.
Academia de Centroamérica (ACA)
AccèsBanque Madagascar (ABM)
African Development Bank (AFDB)
African Foundation for Development (AFFORD)
Amhara Credit and Savings Institutions (ACSI)
Appui au Développement Autonome (ADA)
Asia-Pacific Postal Union (APPU)
Asociación de Bolivianos en España (ASBOE)
Asociación de Instituciones Peruanas de los
Estados Unidos y Canadá (AIPEUC)
Asociación Peruana Virgen De Cocharcas
(AVICO)
Association of Ethiopian Microfinance
Institutions (AEMFI)
Atikha Overseas Workers and Communities
Initiative Inc. (ATIKHA)
AUX-EL
AUXFIN
Banca Popolare Etica
Banco Continental S.A.E.C.A.
Banco de Oro (BDO)
Banco Hipotecario Dominicano (BHD)
Banco Nacional de Costa Rica (BNCR)
Bank Asia Ltd.
Banque d’Escompte
Basic Unit for Resources and Opportunities of
Bangladesh (BURO)
BASIX
Business Consulting Institute (BCI)
Business in Development (BiD) Network
Foundation
Cameroon Cooperative Credit Union League
(CamCCUL)
Casa de Bolivia
Centre for Economic and Social Studies (CESS)
Centre for Micro Finance (CMF)
Centro de Educación y Capacitación del
Campesinado del Azuay (CECCA)
Centro de Fomento a Iniciativas Económicas
S.A. (FIE)
Centro de Incubación de Empresas del Instituto
Tecnológico de Costa Rica (CIE-TEC)
Centro de Promoción de la Mujer y el Desarrollo
(CEPROM)
Centro Studi di Politica Internazionale (CeSPI)
Citibank N.A.
Comisión Asesora en Alta Tecnología (CAATEC)
Confédération des Institutions Financières
d’Afrique de l’Ouest (CIF)
Cooperativa de Ahorro y Crédito Jardín Azuayo
(COAC Jardín Azuayo)
Coordinadora Nacional de Peruanos en Italia
(CONAPI)
Crystal Fund
Dedebit Credit and Savings Institution (DECSI)
DolEx
ECOBANK Ghana Limited (ECOBANK)
Espíritu de Santa Cruz de la Sierra
Fadugu
Federación Boliviana de Cooperativas de Ahorro
y Crédito (FEBOCAC)
Federación de Asociaciones de Peruanos en
España (FEDAP)
Federación de Cooperativas de Ahorro y Crédito
de Santa Cruz (FECACRUZ)
Federation of Associations of Senegalese
Migrants in Catalonia (CASC)
Federazione delle Associazioni Senegalesi del
Nord Italia (FASNI)
Femme Développement Entreprise en Afrique
(FDEA)
Filipino Women’s Council (FWC)
Finance Salone Limited (FSL)
FINCA Tajikistan
FINCA Uganda
First MicroFinanceBank – Tajikistan (FMFB-T)
Fondasyon Kole Zepòl (Fonkoze)
Fondo Financiero Privado Ecofuturo S.A.
(ECOFUTURO)
Foundation for Economic Development and
European Integration (FEDEI)
Foundation for International Community
Assistance (FINCA International)
Fundació Privada Servei Solidari per la Inclusió
Social (Servei Solidari)
Fundatia Dezvoltarea Popoarelor Prin Sustinere
Reciproca
Giros y Finanzas Compañía de Financiamiento
Comercial S.A.
Globe Telecom Inc.
Groupe de recherche et d’échanges technologiques (GRET)
GSM Association (GSMA)
G-Xchange Inc. (GXI)
Habitat for Humanity Tajikistan (HFH Tajikistan)
Hatton National Bank, PLC (HNB)
Himilo Relief and Development Association
(HIRDA)
Humana People to People (HPP)
Indian Grameen Services (IGS)
Ingenicard Inc.
Instituto de Formación Bancaria (IFB)
Instituto de Migración y Desarrollo en la Región
Andina (INMIGRA)
International Agency for Source Country
Information (IASCI)
International Network of Alternative Financial
Institutions (INAFI)
International Organization for Migration (IOM)
Jamaica National Building Society Foundation
(JNBSF)
Jamaica National Money Services (JNMS)
Jamaica National Small Business Loans Ltd.
(JNSBL)
Junín Gobierno Local
Konecta S.A.
Lanka Orix Finance Company Limited (LOFC)
LBP Financial Services, SpA (LBP)
Lider
LOLC Insurance Company (LOLC INS)
Management Control Systems (MCS)
MapSwitch Uganda Ltd.
Micro Credit Ltd. LOMC
Microfinance International Corporation (MFIC)
Microfinanza Srl
Microinvest
Migom
Ministry of Labour and Transport Management,
Nepal
Ministry of Women, Children and Social Welfare,
Nepal
Mobile Finance Eurasia
Moldova Microfinance Alliance (MMA)
MoneyGram
Movistar
MTN
MTN Cameroon Ltd.
Mutuelle d’Epargne et de Crédit des Emigrés
(MECE)
National Bank of Georgia
Nepal Institute of Development Studies
Netherlands Development Organization (SNV)
Ombona Tahiry Ifampisamborana Vola (OTIV)
Open Revolution LLC.
Opportunity International (OI)
Opportunity International Bank of Malawi (OIBM)
Opportunity International Inc. (OI)
Opportunity International Savings and Loans
Ltd. (OISL)
Oromia Credit and Saving Share Company
(OCSSC)
Oxfam Novib
PlaNet Finance
Postal Savings Bank of China (PSBC)
Pourakhi
Prime Bank Ltd.
Programme d’appui aux mutuelles d’épargne
et de crédit au Sénégal (PAMECAS)
ProRuralInvest
Red Nicaragüense de la Sociedad Civil
para las Migraciones
Red Transaccional Cooperativa (RTC)
Redeban Multicolor S.A.
Regional Commonwealth in the field of
Communications (RCC)
Regione Veneto
Réseau des Caisses d’Epargne et de Crédit du
Mali – Nyèsigiso
Schweizerische Stiftung für technische
Entwicklungszusammenarbeit (Swisscontact)
Sèvis Finansye Fonkoze (SFF)
Síntesis S.A.
SMART Communications Inc.
Soro-soro Ibaba Development Cooperative
(SIDC)
Sri Lanka Bureau of Foreign Employment
(SLBFE)
Sri Lankan Embassies in Italy and Middle East
Tahiry Ifamonjena Amin’ny Vola (TIAVO)
Telefónica S.A.
Telegiros S.A.
Training and Marketing Professionals Inc. (TMPI)
Transfer Express Inc. (TE)
Transformando Cooperativa, Corporación cívica
Daniel Guillar (CECAN)
UMVA
Union des Institutions Mutualiste
Communautaire d’Epargne et de Credit
(U-IMCEC)
Unistream Commercial Bank (JSC)
United Nations Capital Development Fund
(UNCDF)
United Nations Entity for Gender Equality and
the Empowerment of Women (UN Women)
United Nations Development Programme
(UNDP)
Unitransfer Inc.
Universal Postal Union (UPU)
Universidad de Cuenca
Veneto Banca
Veneto Lavoro
Visa Inc.
Western Union
Women’s World Banking (WWB)
World Bank
World Savings Banks Institute/European
Savings Banks Group (WSBI/ESBG)
Yunnan Institute of Development (YID)
International Fund for Agricultural Development (IFAD)
For more information, please visit www.ifad.org
International Fund for Agricultural Development
Pedro De Vasconcelos
FFR Programme Coordinator
Via Paolo di Dono, 44 - 00142 Rome, Italy
Tel: +39 06 54592012 - Fax: +39 06 54593012
E-mail: [email protected]
www.ifad.org/remittances
ifad-un.blogspot.com
www.facebook.com/ifad
www.twitter.com/ifadnews
www.youtube.com/user/ifadTV
May 2013
The International Fund for Agricultural Development (IFAD) works with poor
rural people to enable them to grow and sell more food, increase their
incomes and determine the direction of their own lives. Since 1978, IFAD has
invested about US$14.9 billion in grants and low-interest loans to developing
countries through projects empowering over 410 million people to break out
of poverty, thereby helping to create vibrant rural communities. IFAD is
an international financial institution and a specialized UN agency based in
Rome – the United Nations’ food and agriculture hub. It is a unique
partnership of 172 members from the Organization of the Petroleum Exporting
Countries (OPEC), other developing countries and the Organisation for
Economic Co‑operation and Development (OECD).