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Mobile banking brings financial services to the poor
<p /> <p style="text-align: justify;">The Bank of the Lao PDR (BOL) and its donor agencies are promoting modern payment systems, including mobile banking, to provide people in rural areas with access to finance, support private sector growth and alleviate poverty.<o:p></o:p></p> <p style="text-align: justify;">The World Bank Group, the UN Capital Development Fund (UNCDF), and the Bank of the Lao PDR co-hosted a two day forum on May 7<sup>th</sup> on innovative payment systems and inclusive finance.<o:p></o:p></p> <p style="text-align: justify;">The summit was co-chaired by Vice Governor of BOL, Mr. Sonexay Sithphaxay, Country Manager of the World Bank in Laos, Ms. Keiko Miwa, International Finance Corporation’s (IFC) Resident Representatives in Laos, Mr. Aimilios Chatzinikolaou, and Manager of UNCDF’s branchless and mobile banking section, Mr. Tillman Bruett. Representatives from the Lao government, banks, mobile network operators and other corporations attended the event to learn from experts and exchange ideas on how to build an inclusive finance system using innovative retail payment mechanisms, such as agent-based models and mobile money. IFC, the World Bank and UNCDF are supporting the BOL in its efforts to develop and strengthen the financial system in Laos, particularly through the development of national payment system, which would allow for greater financial inclusion.<o:p></o:p></p> <p style="text-align: justify;">Payment flows in Laos are diverse and largely facilitated by the physical transfer of cash in person or by other similar means. However, commercial banks in the country have limited outreach, with about 2.5 bank branches per 100,000 adults.<o:p></o:p></p> <p style="text-align: justify;">“Demands for modern banking services are growing, “said Mr. Aimilios Chatzinikolaou. “Improved and efficient payment methods for households, and in particular, for small and medium sized enterprises can improve the conditions for the private sector to do business in Laos, eventually contributing to more jobs and sustained economic growth.”<o:p></o:p></p> <p style="text-align: justify;">The IFC and the World Bank currently support the BOL in the development of national payment systems through the ‘First Initiative’, a multi-donor trust fund managed by the World Bank. The fund specifically supports the following three areas: development of a legal and regulatory framework for a national payment system, a development plan, and a roadmap for the introduction of innovative retail payment mechanisms in Laos.<o:p></o:p></p> <p style="text-align: justify;">“Financial sector advancement is a key contributor to the development of the overall economy,” said Ms. Keiko Miwa. “Safe and efficient payment services are essential to the smooth functioning of the economy and expansion of financial inclusion.”<o:p></o:p></p> <p style="text-align: justify;">This week’s event builds on research conducted recently by the IFC, the World Bank, and the UNCDF on payment flows in Laos. The research identified and evaluated the potential for key types of payments such as public and private sector payrolls to be made easier and faster through a national payment system and appropriate retail payment innovations, such as mobile banking.<o:p></o:p></p> <p style="text-align: justify;">“The idea for the summit came from stakeholders, including local banks and mobile network operators, who wanted to learn about payment and financial products that can reach the mass market form international experts,” noted Mr. Bruett. AT the event, representatives from the private sector in Cambodia and the banking sector in Papua New Guinea shared their experience on how to reach citizens without banking services using innovative products, technology, and distribution channels, such as agents and low-cost branches.<o:p></o:p></p> <p style="margin: 0in 0in 10pt; text-align: justify;" class="MsoNormal">The UNCDF, in partnership with the UN Development Programme and the Australian Agency for International Development (AusAID), are supporting the BOL to increase access to financial services for low-income households and micro-entrepreneurs, thereby improving income sustainability and food security for households in Laos.</p> <p style="margin: 0in 0in 10pt; text-align: justify;" class="MsoNormal"><em>Source: Vientiane Times, May 8th - Find original article attached</em></p>