Rethinking Finance


I must admit that I love the title and idea of this piece: a finding that came out of a literature review on migration as an investment strategy. This is one of my most favored results from the decades of Microfinance as a practice: despite many criticisms surrounding it, one thing is clear — it has empowered women in general and empowered disadvantaged women, in particular.

Women represent more than 90% of total microfinance borrowers. As such, they have an especially important role to play in managing finances. Several studies have shown that women proved to manage households’ small businesses more efficiently and to be more reliable clients, with lower default rates. This finding alone is great in serving as a counterpoint to the belief that the poor are risky clients. But the truth is we do not really know the reason for this. Many scholars argue that dichotomizing gender in studies is outdated. That is, we can no longer say that women are such and such (More trustworthy? Better multi-taskers? More intuitive?) or that men have this or that characteristic (More rational? Better at calculation?). The best thing we can infer is that the management of finances has proven to have a positive impact on female decision-making power and has been found to empower women. And perhaps it is this financial education that allows for the self-selection of Microfinance clients as generally reliable and trustworthy women.

I was extremely interested in this theory while I was living in Paris, simply because a big population of our OFWs, the breadwinners of their families, happen to be women. Working women, mothering from afar. If you have had the fortune of coming often to Paris, the city of lights, you will notice that each year the population is increasingly diverse. There are, of course, the well-known and long-standing international pockets of the city: the Jewish quarter of the Marais, Place de l’Italie’s Chinatown, and the collection of Japanese restaurants and grocery shops at the Operá district. If you have ever lived in Paris, you will know the more residential pockets in addition to these: the Iranian quarter at rue des Entrepreneurs, the Armenians at Issy-les-Moulineau, the British and Australian community at Maisons-Lafitte, the Americans that tend to congregate at the 7th arrondissement, and so forth. Whereas people from the outside tend to imagine Parisian life as never-ending cafés and artists walking around wearing a beret and bringing a baguette, nowadays, a trip to the Galleries Lafayette feels like stepping into a shopping mall in Shanghai, with both clients and staff Chinese. If you go to any park with young children, you will notice that most nannies are either of Moroccan or Filipino descent.

Filipino migration to France is a phenomenon resulting from the high demand in the service sector in France and in other European countries. Researchers say that the first group of Filipino migrant domestic workers arrived from the Middle East at the end of the 1970s when their employers began fleeing countries in a state of violence (Lebanon in 1975, then Iran and Iraq), bringing them to France. In France, eight in 10 Filipino migrants are women.

Can we extend the women-as-better-money-managers bias to the OFWs? Can we say that Filipina migrants — being empowered, end up knowing how to manage finances better than if they hadn’t been abroad? It is good to note that there exists a stream of literature touching tangentially on this, stressing the role of women as vital and much emphasized in a transnational home. One of the most key findings in these literatures, particularly that of Dra. Asuncion Fresnoza-Flot, a co-researcher whose works are seminal on the topic, is that OFWs use remittances as a form of “mothering from afar.” In her work she says that the mother is considered the principal or unique breadwinner and that regardless of whether they are married or not, their family is a particularly important part of the lives of these women. It is the principal reason of their movement: that is, to ensure the well-being and future of their children; and is the key motivator for the financial strategies they adopt. Unsurprisingly, the family situation is a big determinant of the investment strategies of migrants, it shapes the entire decision to migrate, it shapes the entire need for the woman to work.

Fresnoza-Flot says that the migrant’s physical absence from the home is compensated somehow by the remittances they regularly send to their families which cover the basic needs of the children. This echoes similar scholars who have said that money can be used as a mechanism for expressing care and responsibility. One specific study even found that remittances have more beneficial effects when OFWs are mothers of the children in question, with differences in the usage of remittances for basic consumption vs. durable goods.

Whereas the above discussed studies have shed light on our knowledge of the financial strategies of the poor and the use of remittances by migrant home households, strangely enough, the links between Migration and Remittance studies and financial inclusion are rarely examined, if ever, in the literature. They seem to be two separate streams of study, with migration and remittance studies being much more Macro and financial inclusion studies, more micro or firm-level. Combining these studies allows us to have a more comprehensive understanding of the reasons and objectives of migration from a poverty alleviation perspective, the actions of the migrants in order to achieve these objectives, and finally, what Microfinance clients have in common with migrants. It puts the spotlight on a key lever in the financial inclusion story: the role of migration, with women, especially working mothers, at the heart of it.

Fresnoza-Flot, A., & Pécoud, A. 2007. Emergence of entrepreneurship among Filipino migrants in Paris. Asian and Pacific migration journal, 16(1): 1-28.

Other References are available upon request.


Daniela “Danie” Luz Laurel is a business journalist and anchor-producer of BusinessWorld Live on One News, formerly Bloomberg TV Philippines. Prior to this, she was a permanent professor of Finance at IÉSEG School of Management in Paris and maintains teaching affiliations at IÉSEG and the Ateneo School of Government. She has also worked as an investment banker in The Netherlands. Ms. Laurel holds a Ph.D. in Management Engineering with concentrations in Finance and Accounting from the Politecnico di Milano in Italy and an MBA from the Universidad Carlos III de Madrid.