Seminar of the Czech Republic Prague – February 24, 2009 REMITTANCE FLOWS AND DEVELOPMENT IMPACT AFD APPROACH Guillaume CRUSE Executive Director’s Advisor.

Seminar of the Czech Republic

Prague – February 24, 2009

REMITTANCE FLOWS AND DEVELOPMENT IMPACT

AFD APPROACH

Guillaume CRUSEExecutive Director’s Advisor on migrations

Introduction :

• Supporting and channelling remittance, an important tool for development issues

• But we have to be very cautious :

- Remittance are private flows, mainly for consumption - flows which are very un-precise or badly known

• All this matter as to be discussed :

- with the migrants - with the competent public stakeholders - with the banking system

5

Tableau : les courbes comparées : flux de capitaux privés, IDE, APD et transferts

I – Which objectives to be planed by an organisation such as AFD?

Contribute to regulation

- introducing the real figures, - collaborate to promote the appropriate rules and public regulations - propose good and appropriate financial mechanisms

In the field or remittance

1) having a better view and figures on the flows and on the real migrant’s practises

- several pasted studies or others going on - knowing facts in transfers - knowing their utilization

Breakdown of Investment Projects in the countries of origin

1% 7%3%

18%

71%

Agriculture

Commerce

Service

Immobilier

Pas de projet

Ratios d’utilisation des fonds (nombre de familles concernées par poste)

Sénégal Mali Maroc Comores

Budget familial 98% 94% 69% 96%Santé 81% 87% 30% 77%Education / formation 55% 59% 26% 39%Immobilier familial 19% 47% 10% 52%Immobilier individuel 14% 29% 6% 17%Investissement productif 11% 46% 13% 28%Projet social 5% 25% 1% 39%

0%

10%

20%

30%

40%

50%

60%

70%

80%

Maroc Sénégal Mali Comores

Répartition des volumes de transferts par poste de dépense

Aide familiale Immobilier Investissements

Introduce transparency – role of the comparison websites

- the first one : the British “sendmoneyhome project” (DFID)

- our “envoidargent” in AFD

2) Reducing the cost of remitting

- Encouraging competition

- Improving a better banking coverage

. create new channels

. sustaining microfinance institutions in the countries of origin

. sustaining mutualism credit system

- Improving security and speed of transfer

. introducing new technologies

. better conveyance of the cash

. use the villages cash office for microfinance

- Sustaining or promoting investments

. welcoming migrants in the banking system

. encourage competition in saving accounts for driving investments

. transfer credit from France to the countries of origin

. encourage new system for insurances

. promote credit for family or individual construction

. in place, give credit and guaranties for productive projects

. introduce a new meso-finance approach

. sustaining the local development

II – developing partnership

- with the appropriate public institutions and ministries

- with European Commission

- with bilateral donors

- with multilateral donors

- with private partners as banks, but maybe also firms

III – Which countries?

- as seen in the studies: Morocco, Senegal, Mali, Comoros

- when we have an official agreement between Governments : Tunisia, Benin, Mauritius, Burkina Faso

- significant other countries : Vietnam, Haiti