Investment and use of remittances: the case of the rail company

Abstract

In this paper we will show the successful use of remittances for investment in productive projects. Remittances are mostly used for the subsistence of migrant families, and a relatively low percentage is used for investment and savings. A successful case of remittance investment is that of the company “La Rielera” located in Urireo, municipality of Salvatierra, Guanajuato. This company was formed as a result of the money sent by one of its members living in the United States. Currently this company employs three or four people (in addition to the family itself) for the production of nopal vegetables and packaging of nopal. The paper is organized as follows: first we present background on migration and remittances in Mexico. In the following section we note data on remittances in Guanajuato and emphasize those sent to the Salvatierra area, where the case of La Rielera is located, as well as on the use of these remittances, where we agree with the findings of other studies since remittances are mainly used for family subsistence and little for investment. In another section we show the case of La Rielera as a way of using remittances in investment. Finally we present some reflections. Although remittances are one of the most important sources of income in the country and for many families in particular, we believe that local development in the sending regions should not be based on them.