New Program Gives ASEAN Nations Boost In Digital Finance
The Monetary Authority of Singapore (MAS) and the United Nations Capital Development Fund (UNCDF) have formed a strategic partnership to facilitate development and access to digital financial services in the ASEAN region, especially remittances for Cambodia, Laos, Myanmar and Vietnam – also known as CLMV.
Under the UNCDF’s Shaping Inclusive Finance Transformations (SHIFT) program to facilitate development and access to digital financial services in the ASEAN region, MAS and UNCDF SHIFT will explore opportunities to work on digitisation of low-tier financial institutions, such as financial cooperatives, microfinance institutions, and banks in ASEAN, particularly in extending last-mile distribution to the base of the pyramid in these markets.
“This collaboration will give UNCDF and MAS the means to rapidly digitise the operations of these financial service providers, enabling them to better aid financial access and usage to serve the marginalised population, including women in these countries,” MAS said.
As the first initiative under the collaboration, the latest Challenge Fund Window provides co-funding grants for innovative, scalable business models that foster regulated international remittances to Cambodia, Laos, Myanmar, and Vietnam for women, and concurrently increase adoption and usage of remittance-linked financial products and services in CLMV.
“Remittances for these four countries contributed $17.2 billion. The growing influx of international remittances to CLMV is playing a significant role in economic development in the Mekong region and can act as a catalyst for the development of the local digital financial services ecosystem by providing greater access to basic financial services,” according to MAS’s report.
The Challenge Fund mechanism incentivises innovations in women-inclusive business models that financial institutions would not ordinarily be prepared to pursue. The fund aims to support projects for which social returns are assured, but financial returns may not yet have been proven.
The UNCDF SHIFT Challenge Fund Window, focusing on remittances, is open to applicants from April 7 to June 9, and the grant awards will be finalised by October. MAS will host a SHIFT Challenge Fund workshop in Singapore, and this collaboration on the Challenge Fund Window will culminate in the opportunity for selected applicants’ projects to be showcased at the Singapore FinTech Festival, to be held from November 13 to 17.
“We believe that financial services have a role to play in the economic empowerment of women and the marginalised,” said Sopnendu Mohanty, chief fintech officer at MAS.
Feisal Hussain, senior regional technical advisor and SHIFT program manager, said: “The challenge in providing last-mile financial services requires multiple partnerships and innovations. We are pleased to partner with MAS to promote financial inclusion initiatives that benefit the financially excluded, particularly low-income individuals, women, and small businesses across ASEAN. The collaboration between our respective organisations will further enhance support at country and regional levels to both the private sector and policymakers,” added Hussain.