Cheap money to Mexico

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This extract from the Stanford Social Education Review is a nice overview of microfinance in action in Mexico. One idea: allowing migrant workers to transfer money directly to ATM cards of their relatives back home. The real point, of course, is that it doesn't matter how you do it as long as the transaction costs keep coming down.

In one of our scenarios on 'The Future of Aid', Michael Klein, Klaus Tilmes and I argued that simply by reducing the costs of money transfer, more money would flow to developing countries than flows through IDA, the concessional finance arm of the World Bank.

Update: See this WB report on the potential of remittances, or more from MicroCapital on money transfers to Latin America.

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