Alliance Financial subagents in limbo as court case continues
Published:Sunday | December 19, 2021 | 12:13 AM
Subagents of Alliance Financial Limited, AFL, a group of 68 independent stores that operate windows for MoneyGram remittances, say that their daily revenue has fallen off by half since the December 3 suspension of Alliance’s authorisation to operate cambio and remittance businesses.
The subagents are typically operators of grocery stores, pharmacies, and microloan agencies, and those who spoke with the Financial Gleaner say they are exploring ways to minimise costs due to the suspended remittance service and are anxious for the outcome of the court case against related companies AFL and Alliance Investment Management Limited, AIML, and their principals Peter Chin and Robert Chin.
AFL is a primary agent of cambio and remittance service provider MoneyGram. Alongside the network of 68 subagents it built over 17 years, Alliance Financial itself has five locations across Jamaica.
On Thursday, two of the subagents who spoke with the Financial Gleaner said that they have closed their doors entirely. Others, whose operation includes other commercial activities, remain open to facilitate sales generated from those business segments but say they have slashed the salaries of staff that manned the remittance window, and furloughed others, in the interim.
The owners of larger businesses have reassigned some staff to other duties. Still, there are worries around making bonus payments typically expected by employees during the yuletide season.
“We are caught in the middle of something that we have nothing to do with, and to make matters worse, the suspension has happened in one of the busiest periods of the year,” one subagent said.
Remittances to Jamaica have been rising since the pandemic partly due to the decline in travel. Relatives who would normally hand-deliver cash on their visits to Jamaica are said to be utilising the formal money-transfer network instead due to travel restrictions.
For year ending December 2020, remittances grew nearly 40 per cent to US$2.9 billion. That number has already been surpassed in the 10 months of data reported in 2021. As of October, remittance inflows were estimated at US$3.01 billion, which is already a new record for inflows.
The degree to which Alliance’s suspension will affect December remittances is unclear as market regulator Bank of Jamaica, BOJ, has redirected persons who normally do business with Alliance towards the three other primary MoneyGram agents.
Most of the subagents that were willing to speak with the Financial Gleaner have business operations outside of the cambio and remittance market but say that it is the business segment that is most lucrative, accounting for about 60 per cent of annual revenue on average.
One operator said the furloughs and pay cuts are interim measures that won’t hold beyond year end.
“This is our livelihood, we have families that depend on us, and so if I do not hear something positive coming out of the court case by the end of the year, then I will have to consider some changes,” the Kingston-based subagent said.
To become a subagent of another remittance company would require a new permit from the BOJ, which the subagents said would take at least six weeks to be approved.
A stop order was imposed on the Chins when they appeared before senior parish judge Lori-Ann Cole-Montague in the Kingston and St Andrew Parish Court on Tuesday, December 14. They are charged with breaches of the Bank of Jamaica Act, the Banking Services Act, and the Proceeds of Crime Act. Their next appearance will be on January 10.