The financial and economic crisis is leading many New York residents, mostly Dominicans, to transfer money from their countries of origin to the United States, a phenomenon which reverses the usual flow of remittances.

According to Margarita Cruz, assistant to the president of La Nacional, a money transfer business with offices on Manhattan's 207th Street and with subsidiaries in Europe and Latin America, even though the phenomenon of reverse remittances began about three years ago, it wasn't until this past year that the volume of money transfers into the United States grew so large that the business had to augment the section in charge of managing this revenue stream.

“The Transfer Department was an added service of our business,” said Cruz, “and we had to increase its size because of the sheer volume of its operations.”

Reny Peña, who is in charge of client services at La Nacional, said that 70 percent of these money transfers come from the Dominican Republic, and the remaining 30 percent from Russia, Costa Rica, Colombia, Spain and Ecuador.

“We think that this phenomenon has come about because of the economic crisis, which has gone global, to the dollar's loss of value, which leads to a rise in inflation, and to the unemployment situation that has hit many Dominicans hard,” Cruz asserted.

Peña said that in 2006, for example, the number of transfers to the United States ran to about 150 a month, but in 2008 this number grew exorbitantly, to between 80 and 150 a day.

For reasons of confidentiality, La Nacional did not reveal the amount of money which Dominicans receive through money transfers.

María de Jesús, an employee at Coco Enterprises, an authorized Western Union agent located on 181st Street in the Bronx, revealed that she herself had had to have money transferred from the Dominican Republic in order to cover her expenses in New York.

De Jesús said that many Dominicans prefer to finance their stay in New York through money transfers from the Dominican Republic, because they find that they have more possibilities to move ahead here than in their own country.

“In my case, I've already been here many years, so when I need to, I look to my savings in the Dominican Republic because there is no place for me back home; at my age I'm not going to find a job [there],” said De Jesús.

Many Dominicans keep their savings in Dominican banks under the Certificado Finaciero (Financial Certificate) system, which is known there as frizado, frozen money, for which they receive as much as 14 percent a year. According to information provided by the Banco de Reservas (Reserve Bank) of the Dominican Republic, the interest rate varies in accordance with resolutions by the monetary authorities, and depends on the total amount in the account. At a rate of 12 percent, three million Dominican pesos (some $90,000) certificate pays 36,000 pesos a month (some $1,100).

Transfers by the numbers

According to the Central Bank of the Dominican Republic, family members in the United States received $3,032,700,000 in remittances in 2007 from the home country. It is estimated that 60 percent of this money is used for daily expenditures: for services and food. The Dominican Association of Corporate Foreign Exchange Remittances expects a growth factor in remittances of two percent in comparison to 2008, when the growth over the previous year was 10.77 percent.