IOM to contribute to rerouting remittances to entrepreneurial growth

The International Organisation for Migration (IOM) has launched a project for 2007-2008, titled: “Beyond Poverty Alleviation: Developing a Legal, Regulatory and Institutional Framework for Leveraging Migrant Remittances for Entrepreneurial Growth in Moldova”. The European Commission funds 80% of this EUR 1 mln project. This initiative is part of the strategy of the Moldovan Government to create effective mechanisms for regulated migration and a favourable environment for investment of remittances in Moldova. The project will facilitate the establishment of the national organisation for small businesses and develop information campaigns promoting legal channels of money transfers. Additionally, the project will train migrant workers and their families to start up or improve a business, as well as build linkages between Moldovan Diaspora and its home country. The project activities also include the elaboration of a business start-up almanac for beginner entrepreneurs and a manual on Financial Services aimed at helping small entrepreneurs to benefit from adequate financial services. "This project begins in the wake of strengthened interest of the Government and the international community to link migration with development. It is a first step in a process that will see more Moldovan migrants returning to Moldova rather than leaving”, said Martin Wyss of IOM Moldova. According to the World Bank, Moldova is the first in Europe in terms of the size of remittances in proportion to GDP, constituting its one third. According to the National Bank of Moldova, in 2006, Moldovans migrants remitted almost USD 855 mln. The recent IOM “Migration and Remittances Survey 2006” shows that over 40% of the population lives in households that receive remittances. The majority of these flows are used to fund basic household consumption, consumer durables, purchase of housing and debt repayment. Very little of these flows, less than 7 percent, are being used to finance business investment and as little as 5 percent are saved in bank accounts.