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Banks Intermediate 90% of Remittances
El Heraldo
July 10, 2003
Martha Castelar
Translation by PADF
Between 20% and 25% of dollar transfers by Honduras abroad are reported by BCH.
Tegucigalpa. Banking institutions intermediate almost all remittances sent by Hondurans living abroad to their relatives. Camilo Atala, consulting minister of investment promotion, mentioned that 90 percent of formal remittances are transferred through private banks, either directly or by paying foreign companies. He adds that the bank’s tendency to carry out these types of transaction is quantitative, given the great number of them.
For Atala, president of the board of directors of Divisas Corporativas, between 20 and 25 percent of remittances that come into the country are not reported by the Central Bank of Honduras (BCH), which means that they are brought in by “viajeros” (people who bring things back and forth for a living) or messenger companies.
Evolution
For Atala, who also has shares in a bank with operations in several US cities, the mechanisms to transfer remittances have gone through three phases. The first one in 1997, when the informal “money orders” begin, these are viajeros and couriers, with relatively high prices and disadvantages in terms of security.
The second phase takes place between 1997-2000, which is when messenger agencies start to pop up, providing more efficient and immediate services; the last phase started in 2001, and it is characterized by the supervision of controlling entities in the United States who look out for money laundering and terrorism-related activities, the intervention of more educated immigrants, and an increase of the Temporary Protection Status (TPS).
Costs
Given the complaints that the costs for transferring dollars are too high in the country, Atala believes it is the result of the fact that market forces are establishing the fair prices. Nevertheless, he assures that Hondurans used to pay between 25 and 30% of what they were sending, while today they are only paying between 7 and 8 percent, since more companies are providing transfer services that are faster, more direct, and more secure.
Projects
Atala and others who have been participating in an international remittances summit, which started on Tuesday and finishes today, agree that there is a need for immigrants to be part of the infrastructure projects in their areas of origin.
Dale A. Crowell, remittances program manager for the Pan American Development Foundation (PADF), believes that for this, it is necessary to get civil society organizations and the government, as well as financial institutions involved, because the idea is to create a point for development that is a remittance alliance.
He talked about the experiences in Haiti, Mexico, and El Salvador where, in addition to immigrant funds, funds from the United States International Development Agency (USAID) were used to develop projects related to agriculture, in an attempt to create employment opportunities for the people in these countries.
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