Lao PDR Annual Monitor 2016
Financial inclusion requires involving the entire financial sector to serve low-income and rural households.
The most promising development in decades is the innovative use of mobile phones and digital finance as a means to advance financial inclusion. Unfortunately, the benefits of this technology are not reaching the poor in most least developed countries (LDCs).
Most people and small businesses in LDCs today do not fully participate in the formal financial system. They transact exclusively in cash, have no safe way to save or invest money, and do not have access to credit beyond informal lenders and personal networks.
While mobile phone usage and internet access have increased rapidly over the last decade, the potential to adopt digital financial services (DFS) remains largely unexploited.
MM4P is working intently with banks, mobile network operators, regulators and users of DFS in challenging markets to help reach millions of additional customers who are currently financially excluded. In doing so, MM4P hopes to prove that these services can be provided responsibly, at a reasonable cost, by sustainable institutions in a well-regulated environment.
The experience of UNCDF has shown that while it can rush to innovate, long-term results are better when it takes the time to win buy-in, in part by working to improve partners’ existing operations.
MM4P uses a theory of change approach to DFS development, which focuses on making shifts between phases of market development, moving from Inception to Start-Up to Expansion and eventually to a mature market known as Consolidation. Through each phase, MM4P takes into account the entire DFS ecosystem. This means MM4P plans activities at the levels of Policy & Regulation,Infrastructure, Providers, Distribution, High Volume and Customers to improve market conditions and facilitate shifts.
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