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 Business News | March 2006 
Companies Cross Borders for Immigrants
 Peter Prengaman - LocalNewsLeader.com
Los Angeles - Odilon Hernandez recently bought a television for his parents back home in Puebla, Mexico. But he didn‘t intend to ship it or even load it in his car for his next trip across the border.
For Mother‘s Day, Hernandez bought a refrigerator and stove at the same La Curacao store where he shopped for the TV. Both kitchen appliances were delivered to his parents‘ house from well-stocked warehouses in Mexico.
Immigrants have long sent money to relatives back home through wire-transfer services. But as the remittance market explodes — Latin American and Caribbean immigrants in the U.S. sent an estimated $40 billion home in 2005 — stores and financial institutions are rushing to create new services to capitalize even more.
Immigrants can now send everything from flowers to dining room sets. Many stores give them credit, even if they are in the United States illegally. They can even finance a house in their native country and make payments here.
"We are basically financing people who often don‘t have a Social Security number or legal residence," said Mauricio Fux, La Curacao vice president for corporate development. "With billions of dollars going home to Mexico, we always ask ourselves, ‘What can we do that is different?‘ to capture some of it."
That sometimes means using donkeys, small boats or other unconventional methods to make deliveries to remote locations, he said.
Many of the firms involved are American-owned, and the purchases are akin to U.S. citizens using a catalog or the Internet to order products abroad.
The heaviest demand for the retail products comes from Mexico, Guatemala, Nicaragua and El Salvador . Some companies also cater to other Latin American and Caribbean nations.
The scale is so large that the bank has identified money for goods and services, along with traditional remittances, as tools for development in Latin America, especially to build houses.
Construmex, a U.S.-based unit of Mexican cement giant Cemex, helps Mexican immigrants find materials and contract with firms back home to have homes built. Construmex also provides financing to buy existing houses.
Immigrants must first have a down payment of 12 percent of the value of a house, which generally cost about $35,000, said Luis Enrique Martinez, Construmex‘s U.S. general manager.
The dwelling can be paid off using a payment plan lasting as long as 10 years. In a way similar to a bank, Construmex will foreclose if payments stop.
Construmex doesn‘t ask applicants about their residency status in the U.S., Martinez said. Instead, it bases approval on whether an immigrant earns enough to make the monthly payments.
The program began five years ago in Los Angeles and has since expanded to major cities around the country with large Mexican populations. It‘s become popular with Mexican immigrants because it guarantees the money they earn here goes toward something concrete.
"Many people come here thinking they‘ll save money to build a house," Martinez said. "But often money sent home isn‘t used for that, and they return with nothing."
Many immigrants agree that it‘s better to buy products than send money.
"When I send money they don‘t buy what they need," said Teresa Rodriguez, 55, who has sent everything from refrigerators to g
On the Net: La Curacao: http://www.lacuracao.com/English/overview.htm - Construmex: http://www.cemexmexico.com/se/se_co.html |
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