Remittances, Microfinance and Community Informatics - Development and Governance Issues

This paper states that remittances from international migrants are a significant source of capital for families and community development programs in Latin America.

The paper highlights that:

• In Mesoamerica, all the economies sustain their informal sectors via remittance transfers from migrants in the United States and Canada;
• Remittance transfer reform involves governance issues that link the fields of telecommunication and financial regulation with the politics of public policy negotiations;
• Microfinance institutions (MFIs), internet service providers (ISPs) and non-government organizations (NGOs) tend to be regulated by separate state entities, whose autonomy, accountability and transparency varies. This is a major a hurdle in bringing about remittance reforms.

The paper argues that to liberate more capital for families and their community development, a common strategy should be devised that links the Hometown Associations (HTAs) with receiving country financial and telecommunications regulators and relevant government programs. It also suggests:

• Connecting the network of MFIs and their branch offices to the internet would help offer many financial and commercial services via stored value cards (SVCs);
• Commercial banks and MFIs can help enhance agricultural production with remittance-anchored credit schemes through a set of software tools that link databases with decision support tools.

The paper concludes that remittance transfer reform is linked to the focused emergence of a community informatics perspective among HTAs, MFIs and policy-linked government agencies. This can occur along with a territory-anchored rural development strategy.