Argentina, like Peru, receives more and more remittances from abroad

The Coronavirus pandemic and the shutdown of the Argentine economy in 2020 has finished consolidating a visible trend since mid 2018: More and more people in the country are receiving help from family and friends abroad in the form of remittances.

Nail consignment it’s a send money from one country to another, usually run by people migrantsEither in the form of transfers, checks or even cash. According to World Bank data, one in nine in the world depends on this aid to be able to meet its expenses.

Argentina was considered traditionally an economy remittance sender. During the 1990s, immigrants who came to work in the country sent help to family and friends in their home countries. Just in the worst moment of the 2001 crisis, the equation has been changed: of the total amount sent between countries, 40% was outgoing money from Argentina.

But after the economic recovery in the early 2000s, Argentina regained its role as a “helping” economy for other countries in the region. However, now this balance between money received and money sent is reversed: 70% of the volume handled by transfer companies operating in the country corresponds to contributions from abroad for support expenses residents.

The devaluation of the peso, inflation and the decline in the purchasing power of wages largely explain this change in trend. While on average, Argentines who are abroad send to country about US $ 300 as an aid; residents of Argentina who continue to send aid to their home country they only remit around US $ 100.

“Since the second half of 2018, we have seen how the mix between what is sent and what is received changes. The proportion has increased quarter by quarter over the past two and a half years. last quarter of 2020 the silver record who entered the country in the form of aid. It was the highest peak in remittance income in the country’s history, even overcome the worst moment of the 2001/2002 crisis “, said to Bugle, Maximiliano Babino, CEO of Western Union.

Babino links his company’s figures to the worsening economic crisis in recent years. “They are not only linked to the crisis suffered by many people, who need money from abroad to make ends meet. But it also shows a situation that has occurred, especially for immigrants in the country in recent years: on the one hand, their wages are leaving them lower margin to send money to their country of origin; and also, before lack of work, Many they decide to become“said the executive.

In the period from January to November of last year, almost 70% of the money paid by Western Union in the country came from countries such as Chile, United States and Spain. Meanwhile, Paraguay, Colombia and also Spain still appear as destinations for these remittances from Argentina. “Argentina was transformed in the last period into a country where its inhabitants They need this help to make ends meet. Not at the level of other Latin American countries, usually remittance destinations, but part of the region, like peru“, He said.

Recently, the firm presented its digital solution, Wu.com, in the country to send it directly to a bank account anywhere in the world in virtual form.

Fintech XCOOP reached its climax before the pandemic with the launch, at the end of 2019, of a 100% digital money transfer model between countries. Alex Toriglia, its CEO, explained that despite the global uncertainty recorded in 2020, they have seen strong growth in their user base and the money raised. “Above all, we see a lot of volume entering the country in two corridors: that of United States – Argentina and the one at Spain – Argentina. Many people who have settled abroad use our app to send help to their families, ”he said.

Of the 28 countries where this company operates, in 2020 Argentina was the one that received the largest volume of money, over Colombia, Peru, Brazil and Spain. “The money from the remittances is mainly spent on food, health and clothing, so we are talking about basic needs,” Toriglia said, while saying: “But during the pandemic we have seen that Argentines with funds abroad have also used our application to be able to receive this money on their accounts in the country “.