TechnoServe and MFIC Launch Program to Use Migrant Remittances to Foster Entrepreneurship in Developing Countries
Program is among first to promote using remittances to drive economic development
DECEMBER 5, 2007 — TechnoServe and Microfinance International Corporation (MFIC) have launched an innovative program that promotes the use of migrant remittances as a source of investment capital for entrepreneurs in developing countries. The ultimate goal is to promote the growth of small and medium businesses that generate much-needed employment and income for the rural poor in these countries.
The program is one of the first attempts to leverage migrant remittances (money being sent back to the migrants’ home countries) for sustainable economic development in those countries. It capitalizes on TechnoServe’s expertise in developing small and medium enterprises and fits with the organization’s overall vision of identifying and providing support to sustainable opportunities for the poor to lift themselves and their families out of poverty. MFIC brings experience providing retail financial services to the poor as well as its newly developed transnational loan product.
The potential for economic development based on remittance flow is high. Immigrant workers from developing nations collectively sent more than $300 billion worldwide in 2006. However, 80 percent of remittances were estimated to be collected in cash and spent on consumption, rather than being channeled toward asset-generating activities.
The first pilot project, funded by the International Fund for Agricultural Development (IFAD), will promote transnational loans in El Salvador. The synergistic relationship between TechnoServe and MFIC will build on knowledge and networks already in place to take the next step in unlocking the development potential for remittance flows to create jobs and broad-based economic growth for the rural poor.
MFIC will host an information session to provide program details at one of its Alante Financial Branches in the Washington metropolitan area (TBD) at 11am on Saturday, December 15, 2007, where they will also be accepting applications from interested clients.
About TechnoServe: TechnoServe helps entrepreneurial men and women in the developing world to build businesses that provide jobs, income and economic opportunity. Since its founding in 1968, the U.S.-based nonprofit has helped to create or improve more than 2,000 businesses, benefiting millions of people in more than 30 countries. TechnoServe has been recognized as one of the world's “Outstanding Social Entrepreneurs” by the Schwab Foundation for Social Entrepreneurship. A 2007 Financial Times survey rated TechnoServe as one of the world's top five non-governmental organizations (NGOs) for corporate partnerships.
About MFIC: MFIC is a Washington, DC-based private company whose mission is to make affordable professional financial services available for the poor through the use of advanced financial and information technology. Its unique combination of retail operation targeting unbanked immigrants in the U.S. (Alante Financial) and a network of partnering financial institutions in Latin America connected with its remittance platform allow the company to provide transnational families with a line of value-added financial services at both ends of the remittance equation.