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Microfinance Institutions (MFIs) on the Remittances Market: Money Transfer Activity and Savings Mobilisation

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Listed author(s):
  • Ritha Sukadi Mata

Abstract

This paper is a first attempt to empirically measure the impact of a money transfer activity on MFIs’ savings mobilisation. After analysing the opportunities for MFIs to succeed in transforming remittances receivers into clients, the paper empirically tests whether MFIs operating on the remittances market have a significantly higher level of savings than others, thanks to their money transfer activity. After building our variable of interest (a dummy for the money transfer activity) based on the Mixmarket website (for the regions of Latin America and the Caribbean, East Asia and the Pacific, South Asia and Africa), we run a cross-section regression for the year 2006 between the “savings over assets” ratio as explained variable and a set of explaining variables, including our variable of interest. We find a positive and significant coefficient for the money transfer activity dummy. Latest version; August 2011 - http://www.solvay.edu/sites/upload/files/CEB_WorkingPapers/LastUpdate/wp09022.pdf

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Paper provided by ULB -- Universite Libre de Bruxelles in its series Working Papers CEB with number 09-022.RS.

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Length: 32 p.
Date of creation: 2009
Publication status: Published by:
Handle: RePEc:sol:wpaper:09-022
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Keywords: savings; migrants’ savings; remittances; microfinance institutions (MFIs); money transfer activity.;

Find related papers by JEL classification:

  • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
  • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
  • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
  • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

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  1. Giuliano, Paola & Ruiz-Arranz, Marta, 2009. "Remittances, financial development, and growth," Journal of Development Economics, Elsevier, vol. 90(1), pages 144-152, September.
  2. Sanjeev Gupta & Catherine A Pattillo & Smita Wagh, 2007. "Impact of Remittances on Poverty and Financial Development in Sub-Saharan Africa," IMF Working Papers 07/38, International Monetary Fund.
  3. Enrique Alberola & Rodrigo César Salvado, 2006. "Banks, remittances and financial deepening in receiving countries. A model," Working Papers 0621, Banco de España;Working Papers Homepage.
  4. Toxopeus, Helen S. & Lensink, Robert, 2007. "Remittances and Financial Inclusion in Development," WIDER Working Paper Series 049, World Institute for Development Economic Research (UNU-WIDER).
  5. Barry P. Bosworth & Susan M. Collins, 1999. "Capital Flows to Developing Economies: Implications for Saving and Investment," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 30(1), pages 143-180.
  6. Freund, Caroline & Spatafora, Nikola, 2005. "Remittances : transaction costs, determinants, and informal flows," Policy Research Working Paper Series 3704, The World Bank.
  7. Aggarwal, Reena & Demirguc-Kunt, Asli & Martinez Peria, Maria Soledad, 2006. "Do workers'remittances promote financial development ?," Policy Research Working Paper Series 3957, The World Bank.
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Cited by:

  1. Ritha Sukadi Mata, 2014. "Do Migrants' Deposits Reduce Microfinance Institutions Liquidity Risk?," African Development Review, African Development Bank, vol. 26(3), pages 520-531, 09.

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