Presentation on theme: "Microfinance Institutions in the Remittance Market An MFI-to-MFI Model"— Presentation transcript:
1 Microfinance Institutions in the Remittance Market An MFI-to-MFI Model The Role ofMicrofinanceInstitutions in theRemittance MarketAn MFI-to-MFI Model
2 Demographics Latin America Large and growing population High unemployment and skewed income distributionUnited States50 million Hispanics in US (largest minority group)Hispanic population in US increases by 5,000 each day22 million Latin America-born citizens live in US
3 Migration Effects Latin America Similar to women on the homefront who did work of men during WWII: women make big contributions but experience great sufferingRemittances are largest source of hard currency and often exceed export incomeUnited StatesEntrepreneurial; work multiple hourly jobsMaintain close financial ties with family$62B sent to Latin America in 2005 (more than U.S. FDA) – $300B sent globally
4 Latin Financial Market Developing CountriesGrowing microfinance industry serving poor peopleMicrofinance profitability, efficiency and portfolio quality competitive with banks2006 Nobel Peace Prize awarded to microfinanceMFIs ideally suited to serve remittance recipient market
5 U.S. Financial Market United States 40M unbanked (63% Hispanic) Expensive, fragmented industry of mom-and-pop and non- financial providersLittle/no access to creditLow penetration of banks and new technologies in MTO- dominated immigrant market
6 Microfinance Int’l Corp. OverviewFor-profit led by 27-year Bank of Tokyo veteranMFI-to-MFI modelNon-bank supervised by financial commissionersSpecialized to serve bi-national families on both ends of remittance chainUnited StatesHQ in Washington, DC9 MFIC-owned branchesBank and MTO partnersLatin America/WorldwideDistribution in 85 countriesFinancing for MFIsTransnational products
7 Settlement PlatformIT built off Cooperative Open Banking Information System (COBIS) used by 70 banks in 13 countriesConsists of Internet technology and worldwide networkBuilt our own settlement network of financial institutions
8 Transactional Services Alante FinancialOne-stop shop offering integrated, affordable, value-added services and products and professional, bi-lingual serviceLoans and InsuranceUnsecured term loans & credit lines; car loansDomestic and international mortgages/business loansDomestic and international health/life insurance productsTransactional ServicesMoney transferCheck cashingBill pay, money ordersPhone cardsHelp building credit history
11 Turn-key remittance platform for MFIs, banks, credit unions, money transmitters & postal networks ComplianceStrong regulatory support and built-in compliance featuresSystem built post 9/11DistributionLatin America, North America, Asia, Europe, Africa, IndiaMFIs & BanksUnique AdvantagesMarketing & cross-sale supportExtendable as a central processing platform for national and international networks of banks, credit unions, post officesTechnologyBuilt on banking software used by 70 Latin banksSecure web-based interfaces & real-time payout
12 MFI Market Entry Issues Marketing & Data ManagementEstablishing marketing strategyTracking conversion rate from cross-salesBusiness ModelRepresentation offices in foreign country?Partner with large or small money transmitter?Work with multiple money transmitters?Scale & ProfitabilityAbility to generate profitable transaction volumeFinancial capacity & careful liquidity management to handle remittance volumes and potential new loan disbursementsTechnologyEfficient, secure, adaptable data transfer to institution’s MISCost of adopting technology and training
13 Products for MFIs & Banks Value-Added, Full-Service Partner to MFIs & BanksTechnical AssistanceSupport with marketing, compliance, training, product developmentCo-BranchesCo-branching opportunities with Alante Financial to expand products and servicesLoansInstitutional loans for MFIs in our remittance network to support portfolio growthTransnational ServicesMarket channel for MFIs to cross-sell loans and mortgages to remitters in U.S.
14 For More Information mfi-corp.com / alantefinancial.com / ariasfs.com Jennifer Isern, William Donges & Jeremy Smith, Guide to Making Money Transfers Work for Microfinance Institutions: A Technical Guide to Developing and Delivering Money Transfers (CGAP, December 2006)Manuel Orozco and Eve Hamilton, Remittances and MFI Intermediation: Issues and Lessons, July 2005
Your consent to our cookies if you continue to use this website.