INAFI International Implements a User-Owned, Low Cost Remittance Service

International Network of Alternative Financial Institutions (INAFI International) is delighted to announce that it secured funding from the International Fund for Agricultural Development (IFAD) under its Financing Facility for Remittances to start with the implementation of a User-Owned, Low Cost Remittance Service. This service will (i) provide an alternative to the current cash-to-cash dominated remittance services; (ii) increase financial literacy among remittance senders and recipients; and (iii) link remittances to microfinance services allowing access to bank accounts, savings, credit services and innovative remittance-based products and services. Initially, under the scope of the grant agreement signed between INAFI and IFAD, the service will target the important Spain-Senegal corridor and it will therefore be implemented at two INAFI member Micro Finance Institutions in Senegal (FDEA and U-IMCEC). Once the expected results are achieved, the service could easily be rolled out to other countries.

INAFI believes that low-cost transfer of remittances is a necessary tool to bring financial services closer to poor people and expects that this innovative new service will serve as a platform to promote local, social and economic development.

To implement the User-Owned, Low Cost Remittance Service, INAFI signed a partnership agreement with the Barcelona-based Federation of Associations of Senegalese Migrants (CASC) and AUXFIN. CASC is an organization established to promote cooperation and interrelation between the Senegalese community and the Spanish and Senegalese public administrations. AUXFIN will provide the UMVA system, a platform and software developed for small banks, with special functions for migrants and their needs for remittances services. Mr. Marco van Andel, an expert in micro-finance, remittances and financial development was recruited as the project manager of this project. He will be a key collaborator between the three partners and will manage the project on behalf of INAFI.

Soukeyna Ndiaye Ba (Executive Director of INAFI): “INAFI is convinced that remittances sent by migrants have a great development potential and therefore remittances is a key theme in our strategic development plan. New initiatives to leverage remittances for development by linking microfinance and remittances are now being initiated by our network in several countries around the world. We are delighted by the support of IFAD to this specific initiative for which our expectations are very high.“

Amadou Bocar Sam (President of CASC): “The idea of a user-owned, low-cost remittance service has been on top of our agenda for several years and after so much hard work the moment has now come to start implementing the idea. We are convinced that we have the right partners to turn this idea into an innovative reality.”

Cornelis Heesbeen (CEO of AUXFIN): “We are excited to provide our tested UMVA tools and expertise to this ground-breaking initiative. It is a great opportunity for us to start working with INAFI and 2 of its member MFI’s, thus expanding further the scope of our growing activities. New in this project is the Migrant Development Fund; the results of this project will have a large impact for migrants over the world.”

Global Remittance Flows Into Continent Less Than 20 Percent

SINAPI ABA Trust (SAT), a financial institution which seeks to be transforming lives in Africa through micro finance, has revealed that the total global remittance flow into African continent is less than 20 per cent.

The financial institution attributed the low flow of remittance into Africa to lack of confidence and trust building, and exorbitant service charges on the part of the African immigrants.

Speaking in an interview with the Business Chronicle at a conference dubbed 'Harnessing the Potentials of Migration for Development' in Accra, the Chief Executive Officer of SAT, Tony Fosu, added that the percentage of remittances that flows into sub-Sahara Africa when compared with Asia and Latin America countries, which is nothing to write home about.

According to him, the main objective of this conference seeks to link up immigrant associations in the developed world to microfinance institutions in Africa, towards building the necessary confidence so that immigrant organizations and people from Africa can have the confidence to remit money and also to create the necessary environment for people in Africa, to put the money into good use.
Mr. Tony Fosu emphasized that if Africans are able to have access to their remittances on time, they would be able to put the remittances into productive use, such as buying their farming inputs and also pay for other services. This would increase their productivity thereby increase their turn over to improve the national economy.

These institutions face a number of challenges that minimize the comparative advantage they enjoy (for instance geographic location), vis a vis other banking institutions. It is imperative to support MFIs with a realistic lens, in order to increase financial access in Africa through the diaspora".The Principal Investment Officer of African Development Bank (AfDB), Jaaba Rafeal said "The full picture is rather complex because the number of microfinance institutions (MFIs) in Africa operating in the business of remittance transfers is very small, below 5% of all remittance payers.

He noted that although financial institutions generally offer a full range of financial services, the geographic scope of their branches is often limited to their presence in the urban areas.

Source

INAFI International signs partnership agreements with migrant organizations in Belgium, Luxembourg, and The Netherlands

International Network of Alternative Financial Institutions (INAFI International) recently signed partnership agreements with CGMD, FAAL, and DFD  to collaborate the project  “Harnessing the potentials of remittances for development in Africa by linking microfinance institutions (MFIs) and immigrant associations in Europe”(MIGR/2008/153-811), a three-year project funded by the European Commission. The project aims to actively involve diaspora organizations in various activities by forging partnerships.

Soukeyna Ndiaye Ba, Executive Director of INAFI and Pape Sene, President of Coordination Générale des Migrants pour le Développement (CGMD) signed the partnership agreement after the workshop was conducted at the Centre culturel ELZENHOF in Brussels last November 26. The workshop was attended by about 65 participants representing various African diaspora organizations based in Belgium. CGMD is a federation of various diaspora organizations based in Belgium which are actively involved in migration and development.

 In Luxembourg, INAFI signed partnership agreement with the Federation des Associations Africaines du Luxembourg (FAAL) represented by David Foka, President of FAAL. FAAL is a federation of African diaspora organizations based in Luxembourg which primary objective is to facilitate integration of migrants and combat racism and discrimination. Ndiaye Ba signed the agreement representing INAFI International last November 30 at Abbaye de Neumünster, Luxembourg.

Then on December 3, partnership agreement was signed between INAFI International and Diaspora Forum for Development (DFD) at The Hub, Amsterdam, The Netherlands. DFD D) is a platform of more than 40 diaspora organizations, platforms and networks representing more than 30 countries coming from Africa, Latin America and Asia. Santo Deng signed the agreement on behalf of DFD.

The Migrant Tour was launched last October  21 in Montreaux, Switzerland where  INAFI signed  partnership agreement with World Diaspora Fund, a Swiss-based Cooperative which offer migrants a secure investment vehicle that will contribute to the development of their countries of origin. WDF invests through loans, guarantees, or even taking stakes in microfinance institutions in the South. The Fund will also participate in financing infrastructure identified by the migrants. The WDF also invests through guarantees, loans and equity in Microfinance institutions that are regulated and sustainable. It will also participate to the co-financing of infrastructures proposed by the migrants. The WDF will invest through loans, guarantees, or even taking stakes in microfinance institutions in the South. The Fund will also participate in financing infrastructure identified by the migrants.

The project to foster the links between migration and development is being implemented by IINAFI International and Oxfam Novib. The project aims to achieve financial access for migrants and families, and enhance money transfer competition by providing knowledge, technical assistance, and building partnerships to and with immigrant associations in Europe, microfinance institutions in Africa and money transfer operators.

The project will train and enable 10 microfinance institutions (MFIs) located in 10 Sub-Saharan Africa (SSA) countries (Benin, Burkina Faso, Ethiopia, Ghana, Kenya, Mali, Nigeria, Senegal, Tanzania, and Uganda) to increase their competitive edge in money transfers services and other financial-driven instruments. It will also enable MFIs to build partnerships including a co-development program with immigrant associations working or residing in ten European countries (Belgium, France, Germany, Italy, Luxembourg, Netherlands, UK, Spain, Switzerland, and Sweden).

The Migrant Tour was coordinated by Jean Pouit, Project Manager and Daniela Russo, Project Officer. Leila Rispens-Noel, Senior Advisor of INAFI International also participated in the events conducted in Belgium, Luxembourg, and The Netherlands.

FEDECREDITO: IFC Offers First Remittance-Secured Financing for El Salvador’s Microenterprise Sector

San Salvador, El Salvador, June 16, 2010—IFC, a member of the World Bank Group, will provide up to $30 million of debt financing to Fedecredito using an innovative funding approach that leverages the significant remittances of El Salvadorans working abroad to increase lending to microentrepreneurs and low-income people in the country.


This will be the first funding backed by future remittance flows undertaken anywhere by a financial intermediary focused on low-income clients.  Fedecredito is a cooperative owned by 55 El Salvadoran credit unions and workers banks that mobilize savings deposits from 600,000 low-income member owners, who represent close to one-quarter of El Salvador’s workforce.  In addition to raising wholesale funding for these credit unions and workers banks, Fedecredito also processes remittances for them.  Read more

About Fedecredito
Established over 60 years ago, Fedecredito is a cooperative owned by 55 El Salvadoran credit unions and workers banks located throughout the country. These entities mobilize savings from 600,000 individual member-owners.  In turn, they profitably provide credit and other financial services/products to their individual member-owners and microenterprises. One of Fedecredito’s main functions is to complement deposit funding at these credit unions and workers banks to increase the amount of financing made available to their individual member-owners and microenterprises. For more information, visit: www.fedecredito.com.sv.

INAFI attends Africa-Middle East Microcredit Summit in Nairobi

A large delegation from INAFI networks is attending the Africa-Middle East Microcredit Summit in Nairobi which will be held on April 7-10.

If you are attending the Africa – Middle East Regional Microcredit Summit, you may be interested to know that INAFI is conducting an an hour-long associate workshop on Microfinance, Remittances, and Development: INAFI’ Members Responses within the summit itself.

For detailed program of the Summit, please check: http://amms.registration.ca/wp-content/uploads/2009/10/Detailed-Agenda11.pdf

INAFI has been assigned to conduct an associated session with the title "Microfinance, Remittances, and Development: INAFI Members' Responses. The session is scheduled on April 7, 17:45 – 18:45, Room: Tsavo A 

Leila Rispens-Noel, Senior Advisor of INAFI International will lead the session. Detailed description of the session can be dowloaded here

Several members of INAFI will be actively participating in the Summit as panelists in various sessions.

1.      Mr. Fazle Hasan Abed, BRAC Bangladesh

2.      Hon. Soukeyna Ndyiaye Ba, INAFI International

3.      Mr. Akin Akintola, Community Development Foundation, Nigeria

4.      Dr. Jennifer N. Riria, KWFT

5.      Mr. Mwangi Githanga, KWFT

6.      Mr. John Mwara Kibochi, Faulu, Kenya

7.      Mr. Peter Mugendi, KADET Kenya

8.      Mr. Godwin Ehiglamusoe, LAPO Nigeria

9.      Mr. Daouda Sawagodo, FCPB Burkina Faso

Please inform and invite your contacts and networks about the associated session.

See you all in Nairobi!