What Factors Are Driving Remittance Flows to Mexico?
Remittance flows to Mexico have broken several monthly records between January and August, a period in which Mexicans working abroad sent home nearly $24 billion, an increase of 8.7 percent compared to 2018. They have also sent more money per transfer on average than last year, reaching $326. What is driving the increased flow of remittances to Mexico this year, and will the upward trend continue? Which sectors in Mexico are benefiting the most from the money transfers? To what extent are advances in technology, such as blockchain, digital assets and apps, affecting remittance flows and the way recipients use them?
Manuel Orozco, member of the Financial Services Advisor board and director of the Migration, Remittances and Development Program at the Inter-American Dialogue: “The growth in remittances to Mexico is associated with four interconnected factors. First, the length of time in the United States among Mexicans has increased, as many are not returning to their homeland. In turn, the number of remittance senders increases, thus increasing the volume. We have found that more migrants are sending remittances in states that represent an important source of remittances growth. An Inter-American Dialogue study found that while less than 2 percent of remittance senders arrived in 2016 and 2017, the percentage of all Mexican migrants sending money increased from 50 percent in 2006 to 65 percent in 2017. Second, the frequency and principal remitted has been increasing over the past three years and is largely due to increasing family obligations back home (as they stay longer in the United States, their obligations to relatives in Mexico increase). They are also sending more out of fear of being deported, and thus tend to send at least 20 percent more than what they used to. Third, there has been…”Read More
Argentine Peso Weakness Dents Western Union’s Q3 Earnings
BTG Pactual to Start Consumer Platform Testing
Complete editions of the Financial Services Advisor are delivered on a biweekly basis to members of the Dialogue's Corporate Program and other subscribers. Sign up below for a free complimentary preview subscription.
About the Financial Services Advisor
Covering Latin America’s banking and insurance sectors, remittances trends and data, micro lending issues, new technologies in the industry, anti-money laundering regulations, and much more, the Inter-American Dialogue’s biweekly Financial Services Advisor, a sister publication of the Latin America Advisor, gives readers fresh insight and diverse viewpoints from financial sector leaders. To subscribe or for more information, contact Erik Brand, publisher of the Advisor, at email@example.com.