Post on 29-Jun-2015
description
Microfinance and
International Migration
Strengthening Financial Inclusion in Zacatecas,
Mexico
Matt Rolland Fulbright-García Robles Scholar, 2010-2011
Project Overview
Objectives Evaluate the level of financial
inclusion in Zacatecas, focusing on access and use of financial services in marginalized areas;
Investigate adaptations of microfiannce institutions in high migration regions of Mexico;
Analyze existing government programs that provide financial and techinal assistance to migrant-owned businesses.
Activities
Interviews with microfinance institutions in four states: México state, Puebla, Guanajuato, Zacatecas;
Survey of migrant financial needs in migrant clubs in the United States;
Semi-structured interviews with the six government programs encouraging migrant entrepreunership
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Financial Inclusion and Development
“The access and use of a range of products and services by a
population, under an adequate regulatory framework that
protects the interests of consumers and develops their
financial opportunities.” -National Banking and Securities
Commisssion (CNBV)
Promote the well-being and economic development of a group of people through better financial services.
Become more productiveAccessible Credit
Financial EducationBusiness Assistance
Become less vulnerableSavings accounts
InsuranceUtilities payments
Composition of the Financial Sector in Zacatecas
Credit Unions (Cooperativas) nationwide: 8%Total Bank Branches: 136Important role of pawn shops: 30% all points of access to credit
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Geographic
Coverage
52% of all counties in Zacatecas do not have a bank branch
18% of the state population, compared to 10% nationwide, live in counties without bank branches
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Indicators of Access
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Nationally 2.87 bank
branches per 1,000 km2
1.77 bank branches per 10,000 adults
Indicators of Bank Use
Loans provided by Credit Unions
Checking accounts per every 1,000
adults
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Microfinance Institutions serving more to smooth
consumpion in Zacatecas than expand business
Very few checking and savings accounts
Business Use of Credit
Percentage of Businesses with Loans
Businesses in Zacatecas with loans, by number of
employees
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Only 27% of businesses in Zacatecas obtained a
loan
Low use of credit reflects barriers for small
businesses to access credit
Geographic Dispersion
34% of the state population lives in three counties: Fresnillo (14.3%), Guadalupe (10.7%) y Zacatecas (9.3%) 9
51 of every 100 Zacatecans live in towns with a population of 5000 or less
Marginalization and Finance
•Only one of the 9 counties with a ‘high’ grade of marginalization, Pinos, has a bank branch•One of every four Zacatecans lives in a county with high or medium grade of marginalization where there is only one bank branch per every 20,000 adults.
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Small Businesses and Finance
Extremely high dependence on small and micro businesses
Employ 70% of the economically active population
98% of all businesses are small or micro (up to 10 employees)
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Only 20% of micro-businesses sought funding to begin operating (ENAMIN survey)
Migration and Financial Inclusion
Table: Indicators of financial acces by migration region
Total bank branches
Branches per every
10,000 adults
Percent of branches that are
commercial banks
Percent of counties without
bank branches
Traditional Región 33 1.75 79% 48%
Intermediate Región 13 0.76 54% 45%
EmergentRegión 22 1.51 68% 25%
State Total 136 1.41 74% 52%Fuente: Estimaciones del autor con base en CNBV 2010
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Towards a Transnational Microbank
Survey of Migrant Financial Needs
Interviews and Comparison of Microfinance Institutions
operating in high-migration areas
Analysis of government programs supporting migrant
entrepreneurship
Motivation: Of Mexican states, Zacatecas has the highest number of business funded by family members or friends living in a foreign country
Conclusions
High concentration of financial infrastructure in urban areas
Challenge: bring financial services to rural areas
Further, very low business use of credit, especially among micro-businesses
There is a large opportunity for microfinance institutions to meet these needs in rural areas
There exists a new space for collaboration between social development programs and microfinance institutions
New government program to promote financial inclusion
Open new channels of funding to support rural financing efforts (savings and credit services)
Explore new programs to equip microfinance institutions to bring remittance payment services to rural areas
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RecommendationsObservations
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Many Thanks• To COMEXUS and the Fulbright-
García Robles scholarship program
• Dr. García Zamora and the Development Studies
department, UAZ• FEDZAC and migrant leaders
• AMUCSS and the Microfinance institutions
• To the Government Directors and Delegates of Zacatecas
migrant programs
Matt RollandMatt.Rolland@fulbrightmail.org