International Finance
Exclusive Featured Fintech

M-Money: The payment gateway for financial inclusion

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One of M-Money’s near-term operational goals is to offer inward remittances from family members living and working abroad

‘Digital Economy’ has become the key concept in the 21st century global order. While digital infrastructures are undergoing rapid advances, digital lifestyle products and services are witnessing a push too.

Facilitating payments, transfers of money and increased financial inclusion are becoming the key elements of a digital economy. Among the key players shaping the particular domain, International Finance will talk about Lao Mobile Money Sole Company (M-Money), which has emerged as one of the major stakeholders in the Lao PDR’s fintech and financial inclusion push.

Knowing The Company In Detail
With a population of 7.4 million (with a median age of 26), Lao PDR possesses a bright and dynamic socio-economic future. However, a major impediment for the Southeast Asian country has been the poor number of bank accounts held at any one of the nearly 42 individual banks in its jurisdiction. The number stands at only around 1.5 million. Out of the addressable market of approximately 4.5 million people, nearly 3 million individuals lack access to banking products and services.

People who wish to borrow small sums of money fall victim to loan sharks and end up paying up to 20% monthly interest. After its inception in 2019, M-Money quickly realised the problem and now has become a leader in offering the type of financial services needed and demanded by millions of people throughout the country, while promoting financial inclusion.

The venture’s goal is simple, to start providing micro-loans to its customers in the near future.

“As with many non-bank systems that have sprung up globally (especially in countries such as Kenya – M-Pesa – and the Philippines – Smart, Gcash) M-Money is filling a huge gap left between the banked and un-banked, and bringing access to financial services to thousands of people daily,” M-Money told the International Finance.

“Growing the system from inception was not an easy task, and many existing regulations regarding digital or mobile money services had to be revised in cooperation with the respective government agencies, while other guidelines had to be developed and implemented to ensure security, safety, and system integrity – in short developing a mobile payment system that would offer the type of secure and trustworthy services demanded by agencies as well as individual customers,” the company added.

During its launch in 2019, the firm boasted a nationwide network of 186 agents through whom customers could perform cash-in /cash-out services. It has since then grown to well over 3,500 locations, intending to expand to a minimum of one agent per village in villages with a population of more than 300 people.

M-Money Is Here To Make A Difference
Offering cash-in/cash-out points; however, is not the only mechanism on which a mobile money system can function. To make things effective, you need a robust merchant network as well as government-related financial services such as social security, tax, and payment of other benefits, which are an integral part of a fully inclusive economic system, and keeping in mind this principle, M-Money is working closely with agencies to improve their efficiency and capacity to serve the people of Laos.

“With more than 30,000 merchants around the country linked to the M-Money system (and growing daily), customers can purchase many of their daily necessities without the use of cash – a simple scan of a QR code links their payment to the merchants. Similarly, electricity, water, and many other utilities can be paid for through M-Money. When it comes time to remit taxes, or receive pay-outs from the Government, M-Money handles those transactions seamlessly,” it stated further.

One of M-Money’s near-term operational goals is to offer inward remittances from family members living and working abroad.

“For many families in Laos, being able to receive money from their children living and working in nearby Thailand is essential. At present, the system is convoluted, slow, not secure, and expensive. It is M-Money’s goal to be able to allow family members to remit money to their families back home quickly, easily, and most importantly, securely. The inward remittance will benefit not only the many families living in rural areas of the country, but will also strengthen the economies of those areas as access to money through M-Money will mean they can make their purchases near home,” the company explained things further, while interacting with the International Finance.

“Instead of the necessity to travel to larger urban centres to receive their cash and then spend it in those centres on necessities while there, M-Money helps save money by reducing the need for travel, meaning purchases of necessities will be more likely to happen near home, in the villages,” it noted.

All these efforts bring M-Money ‘s vision of financial inclusion of Laotians under the full circle as the venture has expanded its operational scale from local village-level agents to remittances from abroad, while ensuring more purchasing power for its domestic customers.

The Road Ahead
M-Money’s activities and hard work in the front of digital and financial inclusion have not gone unnoticed, and in 2023, the venture was recognised by the International Finance Magazine as the “Fastest Growing Mobile E-Wallet 2023”. Also, at the recently concluded “Fourth ASEAN Digital Ministers Meeting”, M-Money was awarded Bronze at the ASEAN Digital Awards for Digital Inclusivity.

Despite all the above laurels, M-Money knows its work is far from over, with challenges awaiting it, as the venture eyes a transformation of the Laos socio-economic order from being a cash-based one to a “Cashless Society,” while ensuring financial inclusion for all.

“We will continue to drive these efforts and play a leading role in overcoming the digital divide. It is the Company’s vision to be able to facilitate the financial transactions of a nation on the cusp of moving from a least-developed country to a developing country within ASEAN, Asia, and the world and to ensure that all members of society have access to the financial services they need and have a right to demand, whether at the village, city or national level,” M-Money concluded.

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