Haiti remittances sector

Haiti-Remittances sector

Banque de la République d’Haïti

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Haiti-Remittances sector I.

The economic importance and trend

II. III.

The main players Regulatory actions

IV.

De-risking impacts

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I.

Economic importance and trend 

Remittances is a key source of foreign exchange to the Haitian economy 

Approximately an annual average of USD 2 billion of inflows



Feed the supply of foreign currency on the local foreign exchange market which contributes to contain the effect of exchange rate depreciation on local inflation



21% of Haiti’s GDP



Main source of foreign currency registered in Haiti’s balance of payment





Remittances finance a significant part of Haiti’s trade deficit for around 3 Billions. (importation of goods in services $4.5 billions Exportation good and services 1.6 billions, goods 1 billion added value 46-50%) Haiti is the sixth from the top ten most remittance-dependent countries in the world and is the only one in LAC to make the list.

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I.

Economic importance and trend 

Remittances is a key source of foreign exchange to the Haitian economy 



Inflows have been growing at an increasing rate: at the end of 2014, the growth rate reached 10.7% Higher and faster growth than the LAC region and other developing countries of the world according to World bank

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I.

Economic importance and trend ď ą

Remittances is a key source of foreign exchange to the Haitian economy Total inflows (in 000 USD)

1,800,000,000.00

1,700,000,000.00 1,600,000,000.00 1,500,000,000.00

*Figures for the month of Sept.

2015 are not available yet

1,400,000,000.00 1,300,000,000.00 1,200,000,000.00 1,100,000,000.00 1,000,000,000.00

2011 Total inflows 1,381,429

2012 1,440,825

2013 1,528,836

2014 1,692,723

'2015* 1,685,708 5

I.

Economic importance and trend ď ą

Remittances is a key source of foreign exchange to the Haitian economy ďƒ˜

However, the cost of sending remittance in Haiti is higher than that of the LAC region

ďƒ˜

According to World Bank, total cost accounts to 8.69% on average of the total amount sent to Haiti ( 2 percentage point higher than the average of LAC region)

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II.

The main players ď ą

The Haitian remittance market is shared by four remittances institutions and eight commercial banks Market share in 2014 Banques 15% Western Union 34% Unitransfer 16%

Caribbean Center SA (CAM) 20%

Moneygram 15%

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II.

The main players ď ą

The Haitian remittance market is share by four remittances institutions and eight commercial banks Market share in 2015 not included month of sept.

2015 Banques 13%

Unitransfer 16%

Western Union 35%

Caribbean Center SA (CAM) 21% Moneygram 15%

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III. Regulatory actions 

Given the importance of the sector, BRH has taken actions to create conditions promoting transparency, efficiency and risk management 

Creation of a unit to regulate and supervise the remittances institutions



Enacting of circulars and guidelines imposing rules, conducts and statutory reports destined to regulatory authorities (BRH, UCREF) 9

III. Regulatory actions 

Implementation of Training Program with the assistance of the OTA



AML program role and mission of compliance officers Internal control



Know your Customer (KYC)



Both BRH inspectors and key employees at the banks and remittances institutions have received proper trainings through this program

 

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IV. De-risking impacts 

Two main reasons for the termination of the relationship with these banks: 



Economic reasons: the resulted revenues from the CRB are not profitable enough to justify the level of technological investment of these banks to maintain the relationship High risk: Haiti is viewed as a high risk country

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IV. De-risking impacts ďƒ˜

It is worthwhile noting that the big players (Western Union, Money Gram) are not facing the same pressures as the small ones because they have the adequate financial capacity to cope with the constraints. As a consequence, institutions doing remittance business with these players are doing fine except that the volume of transfer leaving Haiti has decreased because of the “Know your agency� process imposed by Western Union.

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