Toward the Mainstream: current trends and dynamics of remittances to Latin America and the Caribbean
By Manuel Orozco
February 1, 2008
This paper seeks to point out to four key issues related to the current trends of money transfers: the problems of lack of banking access despite a demand for financial services, lessons learned when financial intermediation exists, current dynamics in the remittance environment, including problems with account closings. Remittance transfers are one of the manifestations of contemporary transnational family ties and foreign labor mobility. Beyond the large volumes that are sustaining millions of families, these flows contribute to increase savings among recipient households, and in turn strengthen financial institutions and a country’s economy. With appropriate policy tools the impact of these flows will have potential development implications in the countries where these flows are arriving and can help mitigate any new challenges.