Shaping the Remittances Market by Shifting to Formal Systems, June 3-4, Tokyo Japan
As part of the Asia-Pacific Economic Cooperation (APEC) Finance Ministers' process, the Working Group on Alternative Remittance Systems (ARS) will be holding a symposium entitled "Shaping the Remittances Market by Shifting to Formal Systems." The symposium is being held at the Asian Development Bank Institute in Tokyo, Japan on June 3-4, 2004.
This unique event is co-sponsored by the Japanese Ministry of Finance, the Word Bank and the Asian Development Bank.
This symposium will bring together key stakeholders to discuss opportunities and innovations in the cross-border remittance industry and share experiences from all over the world on successful ways to strengthen remittance channels and create market incentives for customers to shift from informal to formal financial systems.
The symposium will feature panel discussions on how to effect a shift from using informal systems to formal systems. The sessions will focus on ways to balance regulations and market incentives in the formal financial sector, explore the need to expand access to financial services in sending and receiving countries and consider how innovative technology can be used to establish new products to generate competition among formal service providers.
The symposium will also seek ways to maximize the development impact of remittances in receiving countries. Underlying these discussions are how governments, private sector and civil society can work together in this process.
The symposium participation will be composed of a wide array of policymakers, academics, private banks and money transfer businesses, and NGOs and microfinance institutions from countries such as the U.S., Mexico, the Philippines, Japan, India, Egypt, Malaysia, and Singapore.
Along with the panel discussions, participants will take advantage of the opportunity to discuss common goals and strategies in the remittance industry, as well as network and build contacts to achieve those goals through "kaizens." (1)
While over $90 billion in recorded remittances were sent last year globally, unrecorded remittances through the informal financial systems can be significant as well(2). Alternative or informal remittance systems can provide critical financial services to migrant worker populations that are disenfranchised from mainstream financial institutions. These systems, furthermore, operate in environments where formal financial systems are underdeveloped or non-existent.
Experience suggests that by strengthening formal financial systems and encouraging remitters to shift towards using formal channels through market incentives, senders and receivers of remittances both will be better served by accessing formal financial services. These provide additional mainstream financial services, and allow for additional safe mechanisms to send money.
By understanding the impediment to using the formal financial systems, policymakers and the private sector can work to overcome these impediments and seek to encourage wider access to and use of financial services.
The APEC Alternative Remittance System (ARS) Initiative was launched in September 2002 by the APEC ARS Working Group - co-chaired by Japan, Singapore, Thailand and the United States - to examine the economic and regulatory factors for using informal remittance services through technical research with the support of the World Bank. (3)
This research forms the basis for this symposium and brings together key stakeholders to seek ways to create the right market conditions to allow remittances to be sent through formal channels.