MICROFINANCE PAPER WRAP-UP: “Remittance-scapes: The Contested Geographies of Remittance Management,” by Vincent Guermond

This paper introduces the concept of “remittance-scapes” as a new way of analyzing, understanding and regulating remittances. Dr Guermond defines remittance-scapes as “the socio-economic and financial institutions, physical structures and cultural practices through which the production, circulation and reception of remittances are accomplished across multiple scales and spaces.”

The author argues that remittances shouldn’t be viewed narrowly as transactions between migrants and recipients, but instead broadly as remittance-scapes, involving stakeholders including “international financial institutions and state actors, RSPs [remittance service providers], fintech [financial technology] companies, microfinance institutions, migrants and remittance recipients.” Viewing remittances as multipart, large-scale transfers of resources enables governments and private actors to understand their worth more deeply, harness more of their development potential, and prioritize the creation of more accessible transfer channels and investment avenues for migrants.

Dr Guermond sees remittance-scapes, which are estimated to be worth USD 100 billion per year, as having the potential to meet the following aspirations, across four segments:

(1) “Remittance Pre-production-scapes,” in which governments recognize the need for remittances; make them possible; and are open to changes in policy that reduce the instability of personal income, mass emigration and “migra-loans” – often illegal loans that finance the travel and related costs of an individual migrating to a new place.

(2) “Remittance Production-scapes,” where private and state institutions view migrants as “professionalized partners in development and leverage their remittances as investments.” This involves dispelling the notion that most remittances are spent on unnecessary consumables and providing more opportunities for the funds to be used for productive investment, such as purchasing property. Remittances also can be an entry point for both underbanked senders and recipients to enter the formal financial system.

(3) “Remittance Circulation-scapes,” in which a safe, competitive and efficient global remittance marketplace is established. Remittance-sending and remittance-receiving countries can achieve this by working with international financial institutions to improve the transparency of money-transfer services. This includes formalizing remittances, improving payment-system infrastructure, and establishing price-comparison websites – all leading to lower costs for sending remittances.

(4) “Remittance Reception-scapes,” where remittances are recognized as a tool to help senders and recipients enter the financial system. Regular remittance receipts can bolster an individual’s creditworthiness, enabling the person to access services such as insurance, business loans, mortgages and credit cards. Additionally, regular remittances can be used to finance public infrastructure projects as they are a “future flow receivable that financial institutions can collateralize to access additional, stable and cheap capital.”

This is a summary of a paper by Vincent Guermond, published by SAGE Publishing, July 2021, 26 pages, available at https://journals.sagepub.com/doi/pdf/10.1177/03091325211033645

By Sophie Fiala, Research Associate

Sources and Additional Resources

Queen Mary University of London profile on Vincent Guermond
https://www.qmul.ac.uk/geog/staff/guermondv.html

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