Remittances—monies sent by migrants to their families in their places of origin—were estimated at over $100 billion worldwide in 2004. Remittances to Latin America and the Caribbean—the number one destination for remittances worldwide—were estimated to have reached $45 billion in 2004. Guatemala received an estimated $2.7 billion in 2004 (IADB/MIF, 2005).

More than three-quarters of remittance recipients in Central America—77% of those in Guatemala, specifically—do not have bank accounts (IADB/MIF, 2003b). Through the provision of remittance services, credit unions can “bank the unbanked,” opening doors of the formal financial system to unbanked remittance recipients.

Credit unions in Guatemala play an important role in the provision of quality, accessible remittance distribution services to poor and low-income recipients. Since beginning the service in August 2001, 25 credit unions affiliated to the Federación Nacional de Cooperativas de Ahorro y Crédito (FENACOAC) have enjoyed a steady growth in both number of transactions and volume. By year-end 2004, the 25 credit unions had achieved a 6.7% market share, distributing $178.8 million in remittances to both members and non-members throughout Guatemala.

In order to examine the role credit unions play as providers of remittance distribution services, the World Council of Credit Unions, Inc. (WOCCU) implemented the first in-depth survey of users of its International Remittance Network (IRnet) services at the five credit unions with the highest market share in Guatemala during the spring of 2004. The five credit unions are: ACREDICOM, COOSADECO, ECOSABA, Parroquial Guadalupana and Guayacan. In each credit union, the survey was carried out in the two branches with the highest level of remittance activity, with the exception of ECOSABA where the survey was carried out only in the one branch that distributes three-quarters of the total remittances received through the credit union. Interviews were conducted with 100 remittance recipients per credit union (102 at COOSADECO), for a total of 502 individuals surveyed about their households. The study was funded by the U.S. Agency for International Development (USAID) Office of Microenterprise Development through the Accelerating Microenterprise Advancement Project (AMAP). WOCCU is a subcontractor to the IBM AMAP Financial Services consortium.

The Spanish version of this publication is available here. 

File
mR 24 Credit Union Remittance Guatemala English 07 05.pdf 469.67 KB  

Author
Mesbah-Khavari, Dina; Evans, Anna Cora; Klaehn, Janette

Institutional Author
World Council of Credit Unions, Inc.

Language
English

Publication Date
07/2005