Economic Analysis of the Effect of Family Remittances on Micro-enterprises

This paper presents an analysis of the relationship between the family remittances and the present state and development of micro-enterprises. It examines the impact of remittances at the level of the global economy, and synthesises the social and economic impact of the remittances and its relationship with the migratory phenomenon. Findings from both bibliographic and multipurpose household survey sources, and interviews with government officials on the impact of the family remittances in the micro- enterprises and global economy, reveal that:

• Proportion of homes of micro-entrepreneurs that receive remittances, is 20% of all the micro-enterprises;
• Few set aside these resources for investment on saving and these enterprises are positioned mostly in the sector of low-level commerce;
• Family remittances represent a key factor for the working of the economy, for the achievement of macroeconomic stability and for satisfying the needs of consumption of the receiving families;
• Remittances can help the rise in the net international reserves;
• Remittances contribute to bridging the commercial gap between the application of the law of monetary integration and to the growth in the internal growth product (PIB).

Finally, the paper:

• Looks at the necessary conditions for the saving and investment of the family remittances;
• Presents some strategies for the productive use of the remittances in the micro-enterprise, among them:
  • A credit program for the micro-enterprise with resources coming from the family remittances,
  • A program of investment for the returnees and,
  • The creation of a promotion center for the micro-enterprise with resources from those origins, such as other programs related with financial services for these entrepreneurial segment.