MICROCAPITAL.ORG STORY: Caribbean MFI Map Financial Group Reports Increase In Microfinance Demand As A Result Of Declining Remittances From The US

It was recently reported [1] on the Reuters news wire that the sustained deterioration in the US economy has had adverse effects on remittances from the country back to the Caribbean. The report refers to research undertaken by the Caribbean MFI, Map Financial Group [2]. According to Map, remittances from American family members to relatives in the Caribbean islands have fallen by approximately 9 percent and this has had a severe impact on a region already suffering from declining tourism revenues and commodity prices. Remittances are stated to be among the top five sources of income for Caribbean residents.

Map’s research showed that in 2008, money received in the form of remittances represented an average of nearly 20 percent of household income in urban areas and more than 25 percent of household income in rural areas. Map stated that the MFI is trying to bridge the significant funding gap that has arisen as a result of the fall in remittances. Many who would traditionally have turned to relatives in the US for help are now approaching MFIs instead. Map was quoted to have seen a significant demand for its microlending services since July 2009 and anticipates further increases in micro-lending as many seek back-to-school and holiday gift-giving loans.

Map, headquartered in New York, is a transnational MFI that focuses on under-served markets in the Carribbean. In 2008, Map acquired FastCash International Limited (FastCash). FastCash is a holding company of five wholly-owned subsidiaries that offer short term micro loans to employees of various governmental agencies and private companies across the Eastern Caribbean. Fastcash currently has offices in the Commonwealth of Dominica, Antigua and Barbuda, St. Lucia, St. Vincent and the Grenadines and Grenada, Carriacou and Petit Martinique. Neither Map nor FastCash currently supply data to the MIX Market portal [3], an online database that houses financial and other information on MFIs around the world.

The significance of remittances in the Caribbean and the rest of the developing world has been covered in previous Microcapital.Org stories [4], [5], [6].

By Chinq Yee Chong, Research Assistant

Bibliography

[1] Article on Reuters entitled ‘U.S. Economic Challenges Placing High Burdens On Caribbean Remittances To Relatives’: http://www.reuters.com/article/pressRelease/idUS193913+01-Sep-2009+PRN20090901

[2] Map Financial Group: http://www.mapfg.com/index.html

[3] The MIX Market: www.mixmarket.org/

[4] MICROCAPITAL PAPER WRAP-UP: Migrant Remittances: A Development Challenge, Published by the African Development Bank Group

[5] PAPER WRAP-UP: Cautious Resilience: The Impact of the Global Financial Crisis on Latin American & Caribbean Microfinance Institutions, by Sebastian von Stauffenberg

[6] MICROCAPITAL STORY: Microfinance Continues to Play a Key Role in Developing Economies as Remittances to Latin America and the Caribbean Decline in 2009.