The Inter-American Development Bank will support the leveraging of remittances to Latin America and the Caribbean to generate concrete progress for the region and its inhabitants, the IDB’s new president, Luis Alberto Moreno said at a summit of Ibero-American heads of state and government.
In a speech at the 15th Ibero-American Summit held last weekend in Salamanca, Spain, Moreno noted that Latin American and Caribbean migrants are likely to send more than $50 billion home this year. However, he added, these funds largely bypass the financial system, limiting their development impact.
During this decade, Moreno said, the IDB will support a variety of programs to create “more and better possibilities for millions of families across the region who receive remittances to get more out of their resources and, at the same time, give future generations of workers better opportunities in their own countries.”
By improving the region’s banking and credit systems, he explained, “these flows can be leveraged to make more efficient use of them and obtain a multiplier effect on development.”
The IDB is uniquely positioned to promote regional public-private partnerships to tap the economic and financial potential of remittances to expand access to credit for micro, small and medium-size enterprises, long-term financing for housing and investments in education, health and social security, he added.
The challenge, Moreno concluded, is to “link the [Latin American and Caribbean] diaspora with their families through the banking system to boost the impact of remittances and offer these transnational families the financial services and products that can help them get ahead.”
Through its Multilateral Investment Fund, the IDB promotes competition among service providers in the remittances industry as well as a greater participation of financial institutions that serve low-income clients. The MIF also supports projects to develop remittance-backed mortgages and business development services targeted at migrants and their families.