Migrant Remittances Newsletter Vol. 2 No. 2

In the August 2005 issue of Migrant Remittances, microfinance service providers (MFPs) from around the globe report on their money transfer products and experience.

Money transfer is one of the most basic financial services. Just about everyone needs to send money at some point - domestically or internationally - whether for remittances or to make a payment. For MFPs serving a low-income clientele in typically unbanked areas, it can be an attractive proposition to introduce a money transfer service to offer their clients an essential service, attract new clients, and generate income from a fee-based product.

The providers' cases in this issue of the newsletter illustrate that money transfer can be an excellent service to create loyalty and to attract clients. They also indicate that some MFPs are better positioned than others to introduce such a product and make it profitable. As the newsletter highlights through the different cases, most of them are licensed as banks, some are credit unions. Among the main factors to consider are markets and anticipated volumes, institutional capacity, and regulations. And a fundamental consideration is whether to target a service at the domestic or the international market and what model provides access to a network of sending and receiving clients.