May 25, 2006
Remittances from Portugal to Brazil could reach 420 million euros a year, study says
Diverging estimates of size of Brazilian immigrant community
LISBON – Brazilian immigrants living in Portugal could be sending around 420 million euros (approximately US$505 million) a year to their homeland, according to a study released here today.
This estimate contrasts with Banco de Portugal’s data, which had remittances to Brazil at 269 million euros (around US$ 325 million) for 2005, as the study Análise do Mercado das Remessas Brasil/Portugal (Analysis of the Brazil/Portugal Remittances Market) observed.
The difference stems largely from the figures for the Brazilian population residing in Portugal. Government statistics state that there were 67,000 Brazilian immigrants here in 2004. According to unofficial estimates cited in the study, there could be as many as 250,000 Brazilians living in this country.
The study was presented at the Ministry of Finance, during a conference attended by Portuguese government authorities, academic researchers, bankers and executives from money transfer companies from Portugal, Brazil and the United States.
The conference was organized by the Ministry of Finance, the Portuguese Banking Association and the Inter-American Development Bank’s Multilateral Investment Fund (MIF). The study was conducted by the Portuguese consulting firm CESO CI, with financial support from the MIF and the IDB-managed Portuguese Fund for Technical Cooperation.
The study was based on official data, documents and legislation related to remittances, interviews with market operators and a survey carried out by the Miami polling firm Bendixen & Associates late in 2005 among 1,000 Brazilian immigrants in Portugal.
According to the survey, nearly 80 percent of these immigrants have been here less than five years. Half of them make under 10,000 euros a year and 90 percent rent. Three out of four respondents send money regularly to their families in Brazil. The average remittance is 320 euros.
Although 76 percent of the people who send money to Brazil have bank accounts in Portugal -- and 70 percent have bank accounts in their homeland -- two out of three immigrants use money transfer companies to make their remittances.
Brazilian migrants evidenced a strong entrepreneurial spirit. Nearly two-thirds of the respondents said they would like to start their own business (41 percent in Brazil and 22 percent in Portugal). A majority (57 percent) expressed interest in investing in small businesses in Brazil.
The study concluded that Portuguese and Brazilian banks should develop financial products and services that may allow migrants to extract greater benefits from their money. It mentioned as a possible model Portugal’s own Sistema Poupança-Emigrante, which encouraged Portuguese migrants to save and invest in their own country.
Additionally, the study suggested that the Brazilian government and banks should ensure stable conditions and rules in order to strengthen migrants’ confidence in sending money through the formal financial system, namely by allaying their fears of additional taxes or surcharges on remittances.
The MIF has also financed studies of remittances sent by Brazilians from the United States and Japan. Last year Brazil received some US$6.4 billion from its expatriates. Mexico was the only Latin American country with a larger volume of remittances in 2005: US$20 billion. The region received a total of US$53.6 billion in these flows.
The MIF, an autonomous fund administered by the IDB, supports private sector development in Latin America and the Caribbean, with an emphasis on microenterprise and small business. Since the year 2000 it has carried out pioneering studies and financed projects involving remittances, seeking to help transnational families obtain more economic benefits from their money transfers.
The IDB is the leading source of multilateral financing for development projects in Latin America and the Caribbean. Portugal is a donor member of the IDB and the MIF.