Microfinance and remittances

Remittances (money sent home by migrants) to developing countries are estimated to have reached USD 325 billion in 2010. In the thesis we focus on the share of remittances that is saved by the receivers and wonder how to maximize its impact on domestic investment. Through a set of questions, we are interested in the role of microfinance institutions (MFIs), as actors of the financial sector, on this issue. Our main results reveal that financial intermediation is a key issue when considering remittances' impact on investment. It also appears that remittances receivers are willing to put their money on deposit accounts when they have the opportunity to do so, and that MFIs can be considered as valuable intermediaries between receivers and the economy. Microfinance can therefore be considered as a tool to improve remittances impact on investment. However, remittances may imply additional risk for MFIs, for instance in terms of funding liquidity risk, as revealed by the case-study we have realized in Mali.© De Boeck Supérieur.