Some weeks, José Edgardo Andrande makes less than $200. Other weeks, his pay tops $1,200. "But then it goes down to $500" the next week, said Mr. Andrande, 42, a job hopper from El Salvador who, for 24 years, has worked as a delivery person, electrician, restaurant worker and builder in the United States.
Despite the changes, one financial transaction has remained the same. Each month he sends $700 home to support his two sons and mother in his native San Salvador.
As the Hispanic population in the United States continues to surge, rising 10 percent to 41.3 million last year, from 37.4 million in 2002, something else is surging along with it: the money, known as remittances, that day laborers who work in America's restaurant kitchens and mow suburbia's lawns send back home. The cash flow was $32 billion in 2004, up from $28 billion in 2002.
This is a business opportunity for some.
A whole industry has sprung up in recent years of companies that not only transfer immigrant workers' money to their homelands cheaply, but also offer them a way to establish credit in the United States and learn how to make their money work harder.
Mr. Andrande is a recent convert. He uses Mi Pueblo, a unit of the Microfinance International Corporation, a Washington company created in 2003 to help immigrants leverage the power of the remittances they send to their home countries and bolster their earning and investment potential in the United States.
Last September, Microfinance started Mi Pueblo to offer account, money transfer, credit, loan and money management services to immigrants from Latin America. "The motive of immigrants is to come here, get a job and to work hard and send money back home to support their family," said Atsumasa Tochisako, Microfinance's chief executive. "But, unfortunately, in a developed country like the U.S., there is not an appropriate financial service infrastructure prepared to serve those immigrant people."
As Microfinance International opens accounts, currently with Salvadorans only, through a pilot program in Maryland, Virginia, Delaware and Washington, it joins a growing contingent of smaller financial institutions, from credit unions to independent banks, that are taking an increasingly larger piece of the remittance pie.
Microfinance International's four shops in the Washington area, for example, recently were conducting 1,500 transactions a month, with an average remittance of $250. But the company says transactions have been increasing recently, by 20 percent a week at each shop, fueled by radio advertisements and fliers distributed in Hispanic neighborhoods as well as by word of mouth. The company projects revenue of $2 million this year and $10 million next year and hopes to become profitable by 2007.
Mr. Tochisako said the remittance market was barely tapped in the United States. Moreover, he hopes to transform remittances from being mainly a means of support for relatives back home into a new source of international financing that can empower immigrants to enhance their financial standing here and abroad, and even become entrepreneurs in the process.
All of that sounds appealing to Mr. Andrande.
"That's a good idea to start a business, but I have to have the money," he said. Most banks see Mr. Andrande, a contract worker, as a risky borrower. But not Microfinance International. It has already provided him two loans worth $5,000 this year, $2,000 of which he has already repaid. And, without a loan, his earnings after the $700 remittance for his two sons and mother in El Salvador might not cover his $610 rent in Washington and other expenses for his wife and two daughters who live here.
Though sending remittances is a decades-old practice, it has only recently been tracked in the United States. Interest among banking centers is growing, largely because the dollar amounts continue to increase each year, said Donald F. Terry, manager of the multilateral investment fund of the Inter-American Development Bank in Washington, a multibillion-dollar lender to Latin American and Caribbean nations.
At the same time, immigrants are becoming more emboldened to establish accounts at financial firms in their communities.
Four bills currently before Congress would make it easier for immigrants to use credit unions for remittances and loans, and credit unions are eager for a greater piece of that business, said Patrick Keefe, vice president of communications for the Credit Union National Association in Washington. Their bid to join the ranks of small financial outfits, large wire-transfer firms and national banks could make for a fiercely competitive market.
Mexico is by far the greatest recipient of remittances, accounting for $16.6 billion there in 2004, according to Inter-American Development Bank statistics. But for other countries, even though they may see less money, remittances are crucial for their economic stability.
"This country is held by remittances," said José Napoleón Duarte, the son of El Salvador's president from 1984 to 1989 with the same name, and the financial manager for Fundación José Napoleón Duarte, a microfinancing company in San Salvador. The company helps some of the country's residents receive the $2.5 billion in remittances sent each year, accounting for up to 25 percent of the country's economy.
It is important to help immigrants in the United States keep remittances flowing, specialists say. But the problem until now has been that immigrants sending cash home often paid stiff fees. The market leader, Western Union, for example, charges $12 to $70, depending on how much money is being sent and to where. The company says its prices are competitive and its plentiful locations more than justify the fees.
But newcomers like Microfinance International say their fees are much lower. Mr. Tochisako's firm charges $6 to send up to $150 to Latin America and $9 for any amount over that. Fees aside, many immigrants are afraid to open accounts at major American banks for several reasons, such as fear that the banks will be as untrustworthy as the banks in their native countries. And they often have not been the most desired customers, they add, because of the small size of their accounts.
They have, instead, wired money through transfer services, and the cash is consumed by families, rarely saved. With the advent of companies like Mr. Tochisako's, that is slowly changing. "One of the things we've seen lately is a lot of people sending remittances from the U.S. are starting to think their money is not being handled well" by recipients, Mr. Duarte said.
For that reason and to help local economies grow, credit unions, banks, microfinancing institutions and others are hoping to funnel remittances into accounts, rather than deliver it as cash. Companies like Microfinance International offer account services so immigrants can wire money from one account to another. That reduces sending fees and helps direct where portions of remittances end up - in savings accounts, for example, rather than directly into the free-spending hands of relatives.
In addition, Microfinance International is building a base of clients in America to increase the company's revenue so that loans starting at $150,000 and up can be given to Latin American microfinance organizations which can, in turn, direct the money to entrepreneurs in their country. Of remittances sent, "most will still be pulled out for consumption," said Mr. Terry of the Inter-American Development Bank, "but 15 to 20 percent stays in for savings." Or at least that's the goal of various initiatives the Inter-American Development Bank is crafting with microfinance groups in the United States and throughout Central and South America.
"Our goal is simply over the next few years to get 10 percent of that flow into Latin America into microfinance institutions," he said. "That means $5 billion of the $50 billion worldwide. That's not impossible." And, 15 to 20 percent into savings, he said, "means more than $1 billion that could be lent to entrepreneurs in those countries."