UNCDF’s Shaping Inclusive Finance Transformations (SHIFT) programme is a market development, technical assistance and financing platform for the ASEAN region. The programme works to transition people with low incomes – especially women – from informal to formal financial services by catalysing innovative partnerships across financial, policy, data and training markets.

Earlier this year, UNCDF SHIFT opened its third Challenge Fund window on ‘Linking Remittances as a Catalyst for Financial Inclusion and Women’s Economic Empowerment’. Companies submitted innovative proposals that use remittances to promote financial inclusion. These proposals focus on services for low-income groups, particularly women in Cambodia, Lao PDR, Myanmar and Viet Nam. Through a rigorous due-diligence and selection process, the most innovative business models, with the potential to transform the cross-board remittance market, were selected. The third window of the Challenge Fund was launched with support from the Australian Department of Foreign Affairs and Trade (DFAT), the Monetary Authority of Singapore (MAS), and Visa, Inc.

Why remittances?
A remittance study conducted by UNCDF SHIFT found there is an estimated US$6-17 billion of unregulated remittance inflows into Cambodia, Lao PDR, Myanmar and Viet Nam (CLMV). Formalising remittances can benefit low-income people with lower costs, improved efficiency and security. Women are the majority recipients of international remittances and often receive them via unregulated channels.

Who applied?
A variety of organizations submitted proposals for the UNCDF SHIFT Challenge Fund Third Window. This demonstrates a market shift away from predominantly bank-led remittances in ASEAN, following regulatory (policy) changes opening up remittance providers outside of banks. The impact of UNCDF supporting these non-bank led remittance innovations is that they, and other up-coming providers, can widely improve the usage of formalized, secure remittances for the largely non-bank, excluded remittance users in the region. Applications were received from institutions across the globe and applicants consisted of:
– Payment Service Providers
– FinTechs
– Banks
– Microfinance Institutions
– Money Transfer Operators
– Technology Providers.

Where is the market focus?
Most of the applications received focused on remittance services in Myanmar, followed by Viet Nam. Applications listed 13 countries as the sending component of the remittance channels. 33% of the applicants were organizations registered in Singapore and 26% based in Viet Nam.

What are the innovations?
Business models submitted showed new and innovative ideas for the region and the extension of remittance elements to existing business models. The applications put forward a range of business models, which included remittance comparison and remittance aggregator platforms, blockchain-based remittance services, and remittance payment mobile apps.

Successful Proposals
UNCDF SHIFT is delighted to announce the four successful proposals of the Challenge Fund Third Window:

1. TransferTo and Fern Software
TransferTo operates a B2B Cross-Border Mobile Payments Network, linking money transfer operators, digital financial services operators, mobile wallets providers, financial institutions, NGOs and global merchants to facilitate mobile-based money transfers to and from emerging markets – including Cambodia, Lao PDR, Myanmar and Viet Nam. As part of their project, TransferTo will be partnering with Fern Software, a global leading provider of banking solutions for inclusive financial institutions, to enable migrant workers to send transfers directly to loan and savings accounts held by their family members at microfinance institutions in the region.

2. AMK Microfinance
One of Cambodia’s largest microfinance institutions, AMK will become the first to introduce a remittance service to its existing customers linking with remittance-sending partners in Thailand, Malaysia and South Korea. The service will benefit lower income women in rural areas and introduce bundled products like microinsurance, savings and housing loans.”

3. Valyou Sdn Bhd
A mobile money wallet platform that will provide low-cost international remittance services from Thailand and Malaysia to Myanmar. Valyou’s local partner in Myanmar, Wave Money, will provide disbursement into mobile money accounts pending regulatory approvals. Customer are also using their mobile money accounts for bill payments, online payments and airtime top-up

4. Singtel Dash
SingCash Pte Ltd offers fast, reliable and affordable remittances to cash pick-up and bank networks in the Philippines, Indonesia, India, Bangladesh and China via the award-winning Singtel Dash app. Their mobile remittance platform offers ease of use and security, while shopfronts at prime locations in Singapore assure migrants on service reliability. In 2018, SingCash will enable remittances to hundreds of cash-out points via quality hub providers and reputable partner networks in Myanmar, thereby increasing access for Myanmar citizens in Singapore to send money home through the Dash Mobile Remittance service.

UNCDF SHIFT will be introducing and showcasing the winners at the Singapore FinTech Festival in November.

UNCDF SHIFT is funded with support from the Australian Department of Foreign Affairs and Trade (DFAT). The third window of the Challenge Fund was launched with support from the Monetary Authority of Singapore (MAS), and Visa, Inc.

This article was featured by UNCDF here.