Workshop: Mapping the stakeholders for digital financial inclusion in Laos
This post was co-authored by Dr. Erin Taylor, Dr. Isaac Lyne, Dr. Salika Onsy, Dr. Daovy Kongmanila and Mr. Khamtou Kanyavong.
Digital financial services are fast becoming readily available in countries around the world, as more and more people have access to smartphones and Internet connectivity. In countries like Laos, this has the potential to transform the financial inclusion landscape.
Today, many Laotians access financial services digitally, especially through banking apps and the use of QR codes, and to a lesser extent via mobile money. But this digital landscape is still very new, and there is plenty of room for developing a greater range of services, including more accessible digital payments options, international transfers, mobile credit and leasing, and applying for insurance over the phone.
How can stakeholders in Laos work together to create a digital financial ecosystem that works for the Laotian people, especially those who are in some way marginalized or who have particular needs?
To answer this question, we are mapping the stakeholders in the entire ecosystem, whether digitized or not. This includes not only companies offering financial services (banks, fintechs, mobile money operators, microfinance institutions), but also organizations working towards the financial inclusion of smallholder farmers (e.g., government bodies, international NGOs, associations), and other institutions and infrastructures that support them (e.g., mobile network operators) or may act as future partners (such as associations and INGOs that can engance the benefit of financial inclusion, even if not working on this issue directly).
We have created a dataset of all the providers we see as part of this financial inclusion landscape, and are in the process of drafting a report that describes this dataset, and draws upon the many excellent reports on financial inclusion in Laos, supplemented by relevant research papers on smallholder farmer finance in Laos and insights from communications with experts in this field
On Wednesday, 1 November, the DiFF team held a workshop at the Crowne Plaza in Vientiane to present the initial results of our project and to get feedback from participants. Attendees included representatives from the National University of Laos, the Bank of Laos (BoL), the Ministry of Finance, the Ministry of Agriculture and Forestry (MAF), the Ministry of Planning and Investment, Lao Microfinance Association, Lao Women's Union, the National Statistics Office, BCEL, Lao National internet Centre(LANIC), CARE International Organization, UNICEF, World Food Programme, Unitel Lao(U-money), Lao National Internet Center and Sparkassenstiftung.
The workshop began with a presentation on the rationale for the DiFF project by Dr. Erin Taylor, followed by a talk by Dr. Isaac Lyne on the stakeholder mapping rationale and method. Dr. Daovy Kongmanila then presented the initial findings of our stakeholder mapping exercise.
We then spent the majority of the workshop in group discussion, led by Dr. Salika Onsy. Participants, divided into two groups, were asked to discuss three topics: 1) The state of the digital landscape for financial inclusion in Laos; 2) How the stakeholder mapping dataset and report might be useful for stakeholders; 3) What's missing from the dataset.
Discussion was lively and productive, with a diverse range of perspectives presented. Participants generally viewed the state of digitization of financial services as being quite new, with the most activity among younger people who are more willing to experiment with technology. People living in remote areas have difficulties accessing banks. Microfinance institutions tend to be more accessible, but they do not usually have digital applications. Some people do not trust mobile money providers because they have had negative experiences, such as going to withdraw money and being told by an agent that they don't have sufficient funds to pay the person. A participant commented:
“Service providers need to ensure that their agents have a steady cash flow... If the service is regular, people will gain confidence and continue to use it because of its convenience.”
Nonetheless, participants tended to think that things are changing fast, and that within two or three years we will see digital services being used much more widely. This observation lines up with the findings of our qualitative research: many participants reported having recently begun using digital financial services, or as having plans to ask their children to teach them how to use them.
However, most participants did not believe that change should be left up to users. Rather, they felt that stakeholders should collaborate to develop better digital services and encourage their use. For example, government ministries could align to ensure they are working in the same direction. Several participants commented that banks have an important role to play here, but that people trust the government more than they trust banks, and so partnerships would be helpful to make the most of banks’ capabilities while leveraging trust in the government. One participant commented:
“If the government sector collaborates with companies and visits the village, people will feel more secure knowing that we are not solely driven by profit, but also aim to impart knowledge and encourage voluntary use of the service.”
One suggestion for how to get more farmers using digital financial services was to work with groups of farmers, such as organic cooperatives, since this is more efficient than trying to approach groups of farmers, as they already have an organizational structure. Any efforts to encourage farmers to use digital financial services should try to include elderly people and women.
A participant felt that digital services might particularly benefit agricultural or savings cooperatives by making financial management more transparent, thereby increasing trust among the group. Digital services may also make it easier for more than one member to manage a cooperative's finances. Similarly, banks may consider developing secure ways that more than one member of a family can access a bank account, but in a way that protects the confidentiality of the primary account owner. For example, a child might be able to use their parent's account to make a bill payment, without actually being able to see all their parents’ financial information or move large amounts of money.
Participants also provided a range of suggestions for projects and programs to include in our dataset. They were enthusiastic about the exercise, with one participant commenting that the report will:
“...provide essential information and recommendations to businesses, financial institutions, app entrepreneurs, banks, and the government regarding the situation in Laos. This information can assist them in establishing national policies, regulations, and rules.”
We are now in the process of finishing a full draft of the report to circulate for comments in January 2024. When published, the report will be publicly available via the DiFF website.
If you have any questions or comments, please get in touch with Dr. Taylor (erin@finthropology.com), Dr. Lyne (I.Lyne@westernsydney.edu.au) or Dr. Onsy (salika@nuol.edu.la).
