Since 2001, the International Remittance Network (IRnet) has distributed nearly 2.5 million transactions worldwide and in February 2006, it surpassed the $1 billion mark in remittance distribution.
Since its inception in 2000, IRnet has expanded its distribution to about 900 points of service through credit unions in Bolivia, Ecuador, El Salvador, Guatemala, Honduras, Jamaica, Mexico, and Nicaragua. It has also improved its scope of service by connecting with non-credit union outlets through strategic alliances with money transfer operators (MTOs) such as VIGO Remittance Corporation, MoneyGram, and Travelex.
Remittances account for the majority of the gross domestic product and exceed the amount of foreign direct investment and foreign aid in some countries. Most recipients are from households that have a per capita income of less than $1 per day. Remittances increase that amount by an average of $16 per day for 41% of receiving households.
As the remittance industry continues to achieve a healthy competitiveness in providing safe, fair, and economical transfers, IRnet has extended its focus beyond solely providing remittances to explore how the money is actually invested once it is received.
While many of the remittance receivers are unbanked (Business Week recently reported that fewer than 10% of remittance recipients have bank accounts), IRnet services have attracted a greater number of people to whom financial services and education are being offered through the credit unions.
"Offering remittance services is a way to get people into credit unions and to educate them into using credit union services, such as borrowing, saving, and securing loans for micro- enterprising," IRnet Officer Tiffany Kultgen explained.
The majority of recipients who choose to save a portion of their remittances in financial institutions identify credit unions as their bank of choice. Of those who don't deposit their money into savings, 65% have expressed an interest in starting an account, according to a 2004 survey in Guatemala. Almost three-quarters of member recipients in Guatemala alone have become credit union members since IRnet began.
Priorities for 2006 include plans to add new countries and payers to the credit union network, to develop targeted services linked to remittances that would help beneficiaries save the money they receive, and to devise marketing tools to draw more people to credit union services.
World Council of Credit Unions is the global trade association and development agency for credit unions. World Council promotes the sustainable development of credit unions and other financial cooperatives around the world to empower people through access to high quality and affordable financial services. World Council advocates on behalf of the global credit union system before international organizations and works with national governments to improve legislation and regulation. Its technical assistance programs introduce new tools and technologies to strengthen credit unions' financial performance and increase their outreach.
World Council has implemented more than 290 technical assistance programs in 71 countries. Worldwide, 56,000 credit unions in 101 countries serve 200 million people. Learn more about World Council's impact around the world at www.woccu.org.