WOCCU Co-hosts E-Conference on Money Transfers with CGAP
March 22, 2006
From February 27 to March 3, 2006, the World Council of Credit Unions (WOCCU), the Consultative Group to Assist the Poor (CGAP) of the World Bank, the Inter-American Development Bank (IADB)/Multilateral Investment Fund (MIF) and the International Fund for Agricultural Development (IFAD) held an e-conference on money transfers for microfinance institutions. The aim of this virtual conference was to help microfinance institutions make strategic and operational decisions on international and domestic money transfers and to generate input for the forthcoming Money Transfer Operational Guide for microfinance institutions (MFIs) developed by CGAP.
Dave Grace, Senior Manager of Association Services WOCCU, served as the facilitator for the conference in which more than 200 people from over 20 countries subscribed to the discussion. The key findings that emerged from the five-day discussion are:
- Strong partnerships with money transfer organizations (MTO)/banks are essential for an effective money transfers service. The MTO/bank partner should be well-researched in advance and the partnership, once formed, needs to be consistently nurtured.
- MTOs provided a clear list of what they seek in money transfers partners, with large, physical distribution networks topping the list. MFIs are looking for MTO/bank partners with a network that can capture volume, that require only a limited up-front investment by the MFI, that consider the cost of transactions for migrants, that has reliable and secure operations, that offers a beneficial fee sharing arrangement (possibly including foreign exchange spread revenue), and that agrees to a well-documented partnership agreement that covers clear exit strategies and timeliness of transaction settlement.
- A patient, soft-sell approach is critical to gaining the trust of the money transfer client prior to cross-selling additional MFI products. Even with this approach, MFIs report that only 10-20% of money transfer recipients become clients of other MFI products.
- Most participants felt that given the right business model and time to grow sufficient volume, money transfers can be a moderately profitable business line.
For more information please visit the conference website at: http://www.dgroups.org/groups/worldbank/moneytransfers/
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, 60,500 credit unions in 109 countries serve 223 million people. Learn more about World Council's impact around the world at www.woccu.org.