Lao PDR

Lao PDR

Lao People's Democratic Republic (Lao PDR), a country in Southeast Asia with 6.8 million people, has started the journey towards digitizing its cash-based economy and introducing digital financial services (DFS) to thousands of previously unbanked customers. Lao PDR is currently in the early stages of the Inception phase of the DFS market. There are several providers in the market that have begun to develop their DFS offerings; however, the lack of regulations has limited their ability to launch services. In Q1 2015, the regulator released draft guidelines for providers (banks and non-banks) to implement DFS and for the market to begin its journey to the Start-Up phase.

The joint Bank of the Lao PDR (BoL) - United Nations Capital Development Fund (UNCDF) programme ‘Making Access to Finance more Inclusive for Poor People’ (MAFIPP)—supported by Australian Aid and in collaboration with the UNCDF Mobile Money for the Poor (MM4P) programme—aims to develop the DFS market from scratch.


Where We Are

  • Draft application process for DFS providers
  • Release of advanced draft regulations on payments
  • Completion of pilot phase of BCOME branchless banking services, with plans for expansion in scale and service offering validated by management
  • Approval by BoL of Unitel application to launch DFS pilot with 143 service points and 50 agents
  • Basic services in development by providers
  • 0.7 active agents per 100,000 adults
  • <1% active users in adult population

What We Did So Far

  • Placed a full-time DFS expert in Lao PDR to manage programme activities
  • Coordinated quarterly working group meetings in the DFS sector
  • Hosted a payments and financial inclusion summit
  • Support the central bank and providers to complete study tours in the Philippines, Cambodia and Uganda
  • Supported the central bank to complete a study tour in the United Republic of Tanzania
  • Supported and disseminated market demand research
  • Provided direct technical assistance to Enterprise of Telecommunications Lao (ETL), Star Telecom (Unitel), BCEL and Lao Development Bank
  • Held strategy and product development workshops for all stakeholders
  • Provided direct technical assistance to the central bank for the development of the DFS pilot application process

What We Plan for 2019

  • 6% active registered DFS users as percentage of adult population (total 289,380)
  • Conduct additional research on customer journey and use cases
  • Facilitate additional workshops on customer journey
  • Provide direct technical support to providers
  • Explore opportunities to move high-volume payments to digital means
  • Explore opportunities for bulk payments
  • Conduct agent network diagnostics and development workshop
  • Support the central bank to develop DFS guidelines and a monitoring framework for DFS activities and to support dissemination of the framework throughout the organization

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