Lee Sorensen, Economic growth, Private Sector Development, Impact funds Expert
Ron Bevacqua, Co-Founder & Managing Director, ACCESS Advisory
Frédéric Ponsot, Remittances and Financial Inclusion Specialist, IFAD
Leigh Moran, Director on the Strategy, Communication and Impact Team, Calvert
Liesl Riddle, Associate Professor, School of Business and International Affairs, George Washington University
Beyond sending money to family, migrants desire to invest in their home country. Unfortunately, they often lack knowledge and means to undertake such investment, which can be intimidating and confusing even under the best circumstances. To overcome this issue, migrants need tools and direction to understand that their funds are being used appropriately and effectively. This situation represents an opportunity for service providers.
Convincing some migrants to invest can be challenging. With limited time (migrants often work 6 days a week) and limited funds, it can be difficult to show the value of savings and investment. The best strategy for reaching migrants is to start with those who are returning home.
The panel discussed four models of diaspora investment:
Diaspora bonds issued by a country to its own diaspora in order to tap into their wealth and finance public investment;
Crowdfunding that allows diaspora to fund small businesses directly with low individual investment amount;
Hybrid models, including matching grant of donor organizations, that allows diaspora to co-invest in SMEs while promoting jobs and local development.
Financial education is key to making investment a priority for migrants and to orient them towards existing and affordable investment options that match their income and goals. Public and private actors should stress the value of putting money toward longer-term projects to accompany changes in financial mindsets and behaviors in favor of savings and long term plans which require a sustained support and communication on the long run.
FSPs should consider migrant-specific needs when developing products. While all customers want services that are convenient and easy to use, migrants in particular may need special considerations such as investments linked to remittances and the ability to contribute small amounts.
Further, as the migrant community is not homogenous, FSPs should market to each segment appropriately. Poorer migrants have different needs than wealthier ones, as do women from men, and older from younger migrants. In this regard, existing products may need to be modified to meet specific needs.