Nepal receives inward remittances worth USD 7 billion per annum, making it one of the major contributors to the country’s GDP. However, only a handful of financial products and services in the market best reflect the realities and aspirations of migrant workers and remittance recipients. With the objective to deliver data driven remittance-linked financial services, Laxmi Bank and New Street Tech, a blockchain enterprise based in India and Middle East, have announced their partnership with investment and technical support from the UN Capital Development Fund (UNCDF). This partnership is further supported by Al Fardan Exchange, a global money transfer operator based in the UAE to explore the role of technology in achieving the sustainable development goals.
On the supply-side, this partnership is exploring the use of MIFIX - a blockchain-enabled lending ecosystem hosted by New Street Tech to facilitate information exchange between stakeholders in the Nepal-UAE corridor. This ecosystem, which recently closed on a USD 2 million seed funding from Unitus Ventures, aims to address common information asymmetry problems, streamline financial processes and create valuable data-driven insights.
On the demand-side, Laxmi Bank, with UNCDF’s technical assistance, will design and deliver customer-centric financial products and services that best reflect the realities and aspirations of migrant workers and remittance recipients. Nuanced financial literacy efforts that specifically address customer perceptions of the formal sector, product relevance and product usage will also form a substantive part of this initiative.
Mr. Ajaya Shah, Chief Executive Officer of Laxmi Bank stated: “We believe it is essential for banks and money transfer operators to continue investment efforts in the overall customer experience on both sides: the remitter and the receiver. We are keen to explore and implement blockchain technology to further improve the delivery of financial services in Nepal. We are looking forward to our partnership with UNCDF, Al Fardan Exchange of UAE and New Street Technology to unlock the potential of technology in remittance sector”.
Ms. Keyzom Ngodup Massally, Technical Specialist at UNCDF says: “We are excited to facilitate cross-border innovation partnerships to influence the significant role that remittances can play in Nepal’s inclusive growth. As a UN agency for the least developed countries, our technical assistance and investments are focused to reduce risks and maximize impact in partnership with the private sector”.
Mr Osama Al Rahma, Chief Executive Officer of Al Fardan Exchange added: “We are delighted to be a part of this unique business model with Laxmi Bank and New Street Tech. Al Fardan Exchange is committed to innovation in financial services and was awarded the Dubai Excellence Award in 2017. With our global network of 140 correspondent relationships and 70+ branches, I am sure that this project will create significant impact by serving the Nepalese community with innovative financial products and services”.
Mr Sajeev Viswanathan, Chief Executive Officer of New Street Tech stated, “MIFIX leverages blockchain technology to deliver financial services to the population excluded from mainstream financial services. This partnership with Laxmi Bank and Al Fardan Exchange, supported by the UNCDF is a global first in the remittances industry.”
About Laxmi Bank
Laxmi Bank is a commercial bank incorporated in Nepal that will design and deliver remittance-linked deposit and credit products for Nepalese migrants in the UAE and their families.
About New Street Tech
New Street Tech is a blockchain enterprise based in India and the Middle East that will provide the blockchain-enabled ecosystem to facilitate delivery of remittance-linked deposit and credit products for Nepalese migrants in the UAE and their families in Nepal.
About Al Fardan Exchange LLC
Al Fardan Exchange LLC is a money transfer operator based in UAE that will support Laxmi Bank in delivering remittance-linked deposit and credit products to Nepalese migrant workers at the last mile.