Also, the case against

Wiko Kabiling — Fri, 15 Dec 2006 16:37:21 -0500

Also, the case against "top-down" approaches or "North-South" control is the lack of understanding regarding the socio-economic intricacies of the society being helped. But in Thamel, the members of the diaspora at one point in time were witnesses to and even participants in these intricacies first hand. This, hopefully, makes the senders better equipped to determine in what areas remittances should be spent so as to have more meaningful and sustainable impact. From this perspective, the operating model is intrinsically "bottom-up".

On Remittances as a Platform (II)

Rob Katz — Fri, 15 Dec 2006 08:47:53 -0500

Guest poster Bal K. Joshi is the co-founder and managing director of Thamel Dot Com, Kathmandu, Nepal. He is also a partner in Thamel International.

By Bal K. Joshi
William Kramer's comments are well taken. His words certainly reflect our belief, that "...economic empowerment is all about choice." However, I would like to add that economic empowerment also includes personal control. Treating remittances as a platform--giving diaspora the choice of directly converting those funds into products and services back in their homeland--allows them to make well informed decisions on the use of their hard-earned dollars. This is not about "top-down" or "North-South" control; it is about value-chain control. The only choice with traditional money transfer services is to remit cash, and the only control is trust and a prayer.

It is important to point out that the transformation in our thinking about remittances and development has been driven from the "bottom-up"; influenced by the stake-holders in the remittance value chain. There are two primary beneficiaries of remittances: beneficiary #1 is the third party (friends or families) receiving the funds (or equivalent); beneficiary #2 is the “remitter” or the diaspora. Both beneficiaries have needs that have to be supported by the remittance platform. It’s a known fact that most of the remittances sent home are used for daily consumption by beneficiary #1. This use of the remittances also meets the needs of beneficiary #2 by providing their desired support for their family. We also agree that the primary developmental impact of this daily consumption is the spending of the money (directly or indirectly) with merchants in the local economy. However, on the ground in Nepal, we see two realities: the massive misuse of remittances by recipients (beneficiary #1); and a strong diaspora (beneficiary #2) interest to invest in SME enterprises.

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Also, the case against

On Remittances as a Platform (II)