International CU Remittance Network Surpasses US$2 Billion; Expands to Peru
February 08, 2008
MADISON, Wis.—World Council of Credit Unions' International Remittance Network (lRnet®), which last year surpassed the US$2 billion mark in total volume of remittance transactions since its inception in 2001, has recently expanded its program to Peru with the addition of 11 credit unions with 31 points of service in the country.
At year-end 2007, there were 128 U.S. credit unions offering Vigo money transfers through World Council's program. With the addition of Peru, credit unions in 10 countries now distribute remittances with IRnet. More than 1.5 million transactions in 2007 carried US$578 million across borders, bringing the total number of transactions performed through IRnet to more than five million.
"Three billion dollars in remittances were sent to Peru last year," said Manuel Rabines, 2nd vice chairman of World Council and general manager of Federación Nacional de Cooperativas de Ahorro y Crédito del Perú (FENACREP), the national association for credit unions in Peru. "Offering remittances through credit unions is a way to attract new members and expand product development. For example, Peruvians living here and abroad want to purchase land for building homes and need affordable ways to finance their children's education. They can do this with access to remittance-linked products through the credit unions."
Through its remittance program, World Council has formed strategic alliances with Vigo, MoneyGram and Coinstar, all well-established money transfer organizations, so that credit unions can offer members and non-members affordable options for sending and receiving remittances. Users can perform not only credit union-to-credit union transactions but may also send from or to retail outlets offering remittances through the same money transfer organization. The security, convenience and affordability of IRnet is an attractive way to introduce the unbanked to credit unions around the world and adds value to member service, especially when credit unions link their products to incoming remittances.
Remittances are the largest source of external financing in many countries. According to the World Bank, they account for more than twice the official aid and nearly two-thirds of foreign investment in developing countries.
The Central Reserve Bank of Peru says remittances from abroad have more than tripled in the last 10 years. Peru was among the top 10 remittance recipients in Latin America and the Caribbean in 2007.
Mexico consistently receives the largest volume and amount of remittance transactions in Latin America and the Caribbean. As the annual rate of growth in remittances to Mexico slowed from 20% to 1.4% in the first nine months of 2007, individual money transfers through credit unions continued to increase. Transactions to Mexico through the IRnet program grew by about 28% during the same time period.
"Given the overall decline in remittances to Mexico in 2007, it's all the more important for beneficiaries to save and productively use their remittance monies in order to create long-term sustainability," said Tiffany Kultgen, remittance services manager. "By receiving their remittances in credit unions, beneficiaries gain access to safe places to save, affordable loans, financial education and more."
For a complete list of credit unions and networks participating in the IRnet program, please visit www.woccu.org/remittances/irnetculist.
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 300+ technical assistance programs in 89 countries. Worldwide, 68,882 credit unions in 109 countries serve 235 million people. Learn more about World Council's impact around the world at www.woccu.org.