MICROCAPITAL BRIEF: Multilateral Investment Fund (MIF) Forecasts Remittances Will Rise in Latin America, Caribbean

The Multilateral Investment Fund (MIF), which is managed by the US-based Inter-American Development Bank (IDB), recently forecast that remittances will rise in Latin American and the Caribbean during 2011 after falling from USD 69.2 billion in 2008 to USD 58.8 billion in 2009 and remaining stable at USD 58.9 billion in 2010. But the purchasing power of those remittances, an important source of capital for poor people in developing countries, is expected to continue to fall. In 2010, the purchasing power of remittances received in Latin America and the Caribbean was 8.9 percent lower than in 2009 due largely to local-currency appreciation.

MIF, which invests in Latin America and the Caribbean, began to study remittances in 2000 to gauge their impact on the finances of poor people although MIF argued at the time that these flows of funds were largely overlooked by governments and international agencies. MIF is currently focused on projects that use remittances as a tool to “bank the unbanked” in order to connect migrants and their families with formal financial services [1].

By John Howard-Smith, Research Associate

About Multilateral Investment Fund (MIF): Multilateral Investment Fund (MIF) is an autonomous fund administered by the Inter-American Development Bank (IDB), a multilateral, development finance organization based in the United States that operates in Latin America and the Caribbean. The fund recently started decentralizing its operations, giving IDB country offices more autonomy to distribute “mini-loans,” with the idea that a greater amount of smaller projects will reach more people. MIF has 38 donating member countries from Latin America, the Caribbean, North America, Europe and Asia. The United States and Japan play leading roles in the organization.

About Inter-American Development Bank (IDB): The Inter-American Development Bank (IDB) is a US-based multilateral finance institution established in 1959 that operates in Latin America and the Caribbean. IDB works with governments, companies and nongovernmental organizations (NGOs) to provide both loans and grants to support small and medium-sized enterprises (SMEs), health, education and other sectors. IDB also provides technical assistance and research in these areas. Its Board of Executives is elected by 48 member countries, 26 of which are located in Latin America and the Caribbean. IDB reported total assets of USD 84 billion as of December 31, 2009.

[1] Inter-American Development Bank News: “Report: Weak Dollar, Inflation Blunting Purchasing Power of Remittances”, http://www.iadb.org/en/news/news-releases/2011-03-14/remittances-to-lati…

MicroCapital Paper Wrap-Up, May 4, 2010: “MICROFINANCE PAPER WRAP-UP: Outlook for Remittance Flows 2010-2011, by Dilip Ratha, Sanket Mohapatra, and Ani Silwal”, https://www.microcapital.org/microfinance-paper-wrap-up-outlook-for-remittance-flows-2010-2011-by-dilip-ratha-sanket-mohapatra-and-ani-silwal/

MicroCapital’s Microfinance Universe profile: Multilateral Investment Fund (MIF), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Multilateral+Investment+Fund+(MIF)

MicroCapital’s Microfinance Universe profile: Inter-American Development Bank (IDB), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Inter-American+Development+Bank+(IDB)

Browse the MicroCapital Universe and add your entry to the wiki at https://www.microcapital.org/microfinanceuniverse/

Similar Posts: