The following describes the questions and topics suggested for class discussion. However, instructors are free to focus on some of these topics, skipping others, according to their objectives.

1. What are the links between remittances and immigration policies?

Many remittance senders take a skeptical view of banks and other financial institutions. These opinions are often based on impressions rather than firsthand knowledge because many remitters and their families do not have bank accounts, credit or debit cards. Minimum balances and transaction fees are widely viewed as excessively burdensome and too expensive for the services rendered.

Also, remitters who were not lawfully admitted to the United States have faced an added obstacle because of the requirement to present US identity documents when applying for a bank account. At least for Mexicans, this situation is now changing rapidly with the growing acceptance by banks of the ID cards issued by Mexican consulates.

In principle, most remitters are anxious to switch to cheaper methods and have no objections to dealing with the banking system or using technology such as Automated Teller Machines (ATMs) or debit cards. However, people who never had a bank account in their home countries and who come from families that never did business with banks are unwilling to consider opening accounts.

2. What kind of business opportunities do remittances represent and how could they be captured?

As companies become more aggressive in targeting Mexicans and Hispanics living in the United States, they are trying to position their names and brands in low income communities, through a close and direct relationship and social responsibility practices, providing customers with products and services according to their needs and development capabilities., specially for those with no access to formal financial services.

Companies that sell higher-end products such as financial services require dipping into savings and thereby causing customers to stop and think before purchasing, so they have been especially shy about targeting low-income markets. Companies can in fact design new offerings for the core of low-income market segments and succeed. However, low-income markets should not be thought of as a downgraded version of mainstream markets. The key is to understand the particular value created for the end-user, which often can only be found through a deep cultural understanding of the issues faced by end-users in these markets, such as in the cases of Grupo Elektra and Western Union, Corporativo Fragua and the “Dolares” Card, Cemex Construmex Program and Banorte and Telecomunicaciones de México (all of them mentioned in the teaching case).

3. Are remittances the same as Foreign Direct Investment (FDI)?

Most remittances are sent to pay for necessities. However, there is a group of remitters who send money back home for investment purposes such as in the Cemex´s housing construction program. Since the receiving families are poor and the remitters distant, remitters maintain little control over how the money is spent. Despite the remittance control, those who remit for investment purposes are no more knowledgeable about the various processes for sending money. This control issue makes a hard definition of what could be differentiated as FDI from a remittances standpoint. Finally, from a macro economic view, Mexico’s authorities declared on February 2006 that FDI became the third biggest source of foreign currency last year, with US$17,804.6 million. On the other hand, oil exports were Mexico’s biggest foreign-currency generator, with US$28 billion, followed by remittances, with US$20,035 million.