Business
Remittances to the Caribbean continue to grow
Caribbean countries continued to benefit from an increase in remittances in 2013, according to figures released by the Multilateral Investment Fund.
According to the investment fund – a member of the Inter-American Development Bank, in 2013, remittances to the Caribbean and Central America 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 the Caribbean and Latin America in 2013: Still below Pre-Crisis Levels,” the fund said that in 2013, the region received a total of US$61.3 billion sent by migrants to their countries of origin.
Remittance flows to the Caribbean and Latin America continue to remain an important source of income for millions of poor and vulnerable families, 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, according to the multilateral investment fund General Manager Nancy Lee.
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 labor 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 investment fund said.
In the years before the financial crisis of 2008-2009, remittances to the region as a whole experienced average annual growth of 17 percent. After a record high in 2008 of US $64.9 billion, there was a sharp drop in 2009 of over 10 percent, followed by an increase in 2011 of 6 percent, and subsequent stagnation that continued up to 2013.
The fund estimates that remittances to the region could increase by 5 – 7 percent in 2014. It said this estimate is based on migration and labor 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. -(CMC)