“Immigrant Remittance Corridors” (RG-M1075).  The NAID Center received official notice in May 2006 that it has been awarded a contract for $430,500 from the Multilateral Investment Fund (MIF) and United Nations International Fund for Agricultural Development (IFAD) Programme for the NAID project titled, “Immigrant Remittance Corridors.” 

Research has demonstrated that remittances offer strong potential for economic development in migrant-sending regions if sufficient financial and productive capacity is sustained through the empowerment of transnational migrant networks. Mexico receives more than 15 billion dollars in the form of foreign savings sent by migrant workers to their families, but the extent of financial intermediation with that money is very limited, mostly a cash-to-cash transfer. Less than 30% of Mexican remittance recipients have bank accounts or have access to credit.  Despite this adversity, research has shown that recipient families put a small fraction of their remittances into productive use. 

At least 2.5 million Salvadorans live in other countries, mainly in the United States. Data published by the Central Reserve Bank of El Salvador indicate that family remittances from Salvadorans living abroad totaled US$2.5 billion in 2004, which are used mainly for basic consumption. In El Salvador, as in Mexico, the recipient families lack the basic financial products and services that would allow them to invest part of the money received in productive projects. The main reason is the same: the remittances flows are mainly done on a cash-to-cash basic rather than using the financial sector.

The project seeks to have remittances flow into accounts in local microfinance institutions (MFIs) to facilitate potential loans for productive projects in the sending regions.  In this way, remittances that are currently channeled through informal means can instead be leveraged through financial institutions to provide working capital to benefit all families in the migrant sending region.  This would include non-migrant households, who are often the poorest members of the village, such as women without male family members in the United States. Socializing remittances through MFIs allows for all local business ventures potentially to benefit from this financial flow.

The UCLA NAID Center will enable or activate an existing but dormant marketplace of both demand and supply of financial services for immigrants and their relatives, through work with MFIs in the United States and rural Mexico and El Salvador.  The centerpiece of this project involves transforming these institutions into remittance senders and payers.

American Integration and Development (NAID) Center was created to conduct ongoing research concerning North American integration and to assist communities and governments with policies and investment projects for sustainable and equitable development across borders. Towards this goal, the NAID Center seeks to build linkages among a wide variety of institutions, organizations, and community groups in North America.