WASHINGTON D.C., United States, Friday June 13, 2014, CMC – Caribbean countries benefitted from an increase in remittances last year according to figures released by the Multilateral Investment Fund (MIF).
The MIF, a member of the Inter-American Development Bank (IDB), said that in 2013, remittances to Central America and the Caribbean increased over the previous year while remittance flows to South America and Mexico declined, resulting in flat growth for the region as a whole.
In its report titled : Remittances to Latin America and the Caribbean in 2013: Still below Pre-Crisis Levels,” the MIF said that last year the region received a total of US$61.3 billion sent by migrants to their countries of origin.
“Remittance fows to Latin America and the Caribbean remain an important source of income for millions of poor and vulnerable families,” said MIF General Manager Nancy Lee.
“Remittance recipients need more access to financial tools that will help them use remittances to save and make investments for their future in areas like education, housing, and starting and growing businesses.”
The report notes that, as this sector has evolved, there is an increasingly wide variety of services available to remittance senders, allowing them to make transfers using bank accounts and debit and credit cards.
However, in many countries in the region, cash withdrawals are still the prevailing option for receiving remittances, showing that financial institutions have business opportunities to offer payment and savings products tailored to customers’ needs and preferences.
The United States is the source of about three-quarters of remittances to the region, followed by Spain. Accordingly, the recoveries of labour demand in the United States and in average wages of workers from Latin America and the Caribbean affected the growth of remittances to Central America and the Caribbean, the MIF said.
In the years before the financial crisis of 2008-2009, remittances to the region as a whole experienced average annual growth of 17 per cent. After a record high in 2008 of US $64.9 billion, there was a sharp drop in 2009 of over 10 per cent, followed by an increase in 2011 of 6 per cent, and subsequent stagnation that continued up to 2013.
The MIF estimates that remittances to the region could increase by five to seven per cent in 2014.
It said this estimate is based on migration and labour trends in 2013 and on expectations for stronger performance in the U.S. and European economies in 2014, already reflected in improved employment figures in the first months of this year.