OY! All you… Out there… guess what? The banks are coming for you!
So… here’s the deal. All over the world, banks and bankers are looking at the poorest of the poor and seeing dollar signs (or euro signs.. whatever). Which under normal circumstances seems just the teeniest bit scummy. But in this case… lets help ‘em out. Wave the money in their faces.. make ‘em come running. Why are they looking at Africa, Central and South America and into every 3rd world nook they can find? What is this golden egg that they are looking to nab? They all want a piece of the remittance pie. So here are a few facts that have banks drooling for a piece of that yummy money pie.

In 2005, they totaled $188 billion—twice the amount of official assistance developing countries received – ~ IMF

The value of remittances from Kenyans in the Diaspora grew from $750 million (Sh53 billion ) in 2005 to more than $1 billion (Sh76 billion) last year. ~ Business Daily Africa

According to the report, “Competing in Money Transfers,” by 2010, global workers’ remittances will total $456 billion, up from $369 billion in 2007. However, the space still remains the domain of the money transmitters, such as Western Union (Englewood, Colo.) and MoneyGram (Minneapolis), the top two transmitters; their 2006 market share reached 13.8 percent and 3.2 percent, respectively. ~ Bank Systems and Technology

The $46 billion in remittances sent to Latin America and the Caribbean last year by 30 million migrants was nearly equal to all foreign investment in private companies! Moreover, migration and remittance experts argue that unofficial transfers could be almost as large as, if not larger than, the formal flows. ~ The Global Microcredit Summit

The number of participants in this market is extraordinary. Estimates are that somewhere around 200 million transnational labor migrants sent money home to their families in 2005. The number of domestic labor migrants is even larger. Most migrant workers send home between US$2,000 and US$5,000 a year – or between 20 and 30 percent of their earnings. ~ The Global Microcredit Summit

AMAZING! Look at all that money…. and unlike Aid money, 100% of the money sent (well ok… minus some…. OUTRAGEOUS FEES) goes directly to the intended recipient, no infrastructure, corruption, paperwork, red-tape cut. Just send the money to your loved one and poof! They can use said money to pay for schooling, housing, food, medical care, clothes, investments, entrepreneurial ventures. Well anyway you get the idea. They get to spend or save the money as they see fit. And here is the coolest thing… remittance money has REAL consequences for the recipient. According to the IMF:

Our empirical analysis—using data from 233 poverty surveys in 76 developing countries, including 24 in SSA—confirms the poverty-reducing effect of remittances: a 10 percent rise in the remittances-to-GDP ratio is associated with a fall of a little more than 1 percent in the percentage of people living on less than $1 a day and the poverty gap (which measures how far below the poverty line the average poor person’s income is). Further, we find that even taking into account the impact of poverty on remittances, in a model in which both poverty and remittances are simultaneously and endogenously determined, the poverty-reducing effect of remittances remains. However, the average remittance-inducing effect is slightly greater. ~ IMF

Real money, having a real impact, on real people…. Imagine if the Diaspora organized? Imagine the power you could wield. The Banks already see the potential. Don’t just let them line up to put their hands in your wallet. Now is the time for the Diaspora to make its voice heard. Economic freedom is a key element to the future success of nations. The people should hold the purse strings… the government should act in the best interest of its citizens…. There should be infrastructure, roads, water, electricity, internet, phone and all the rest of it… across the entire continent. Without it big business will never truly invest resources and build markets. Money is not the whole answer… Lord knows no problem was ever solved by money alone… but true economic freedom, economic parity with the developed world… well money is a fundamental building block to future success.

So why do I think that we should be sending up flares and painting ourselves in neon colors to get the attention of all these banks? Well, the services offered by Banks are also fundamental to financial success… keeping all your money in a sock under the mattress has never proved to be a good long term plan. Building credit, savings, investments… all require a relationship of some sort with a bank… This is true in Africa… and it is true in the Diaspora. So welcome the banks with open arms… and remember when you send the extra $100 back home. You have more impact with that $100 than you ever realized….