Sending children away from home for higher education is considered a requirement for parents to build their children’s future.
Republished from the UNCDF MM4P website: This article was first published on 21 June 2017 at https://www.uncdf.org/article/2512/community-development-through-digital-finance-lao
branchless banking to support education, agribusiness and more
There is an old Lao saying, ‘If you don’t go out of the village, you
will not see the land far away; if you don’t go study, you will not have any
knowledge.’ It is still commonly used in the Lao People's Democratic Republic
(Lao PDR)—a country with a surge in demand for education, with 78% of youth
enrolled in lower secondary education while 56% of adults have primary
education or less (see the figure for more detail).
Sending children away from home for higher education is considered a
requirement for parents to build their children’s future. So, there is little
surprise that sending money to support children’s education has become a primary
use case for the first branchless banking service in Lao PDR.
Banque pour le Commerce Extérieur Lao Public (BCEL), one of the
country’s leading banks, developed the branchless banking service, which is
called BCEL Community Money Express (BCOME). It is entirely new; no other bank
offers this kind of service in Lao PDR. Supported by United Nations Capital
Development Fund (UNCDF) and its national implementation programme Making
Access to Finance More Inclusive for Poor People (MAFIPP) and PHB Development, BCEL
in June 2015 with a small pilot of only 11 agents. Today, with more than
125 agents in every province of the country, BCOME has more than doubled the
size of the BCEL branch and service unit network. Villagers perceive BCOME as
convenient, quick, safe and friendly, the latter because it is offered by
someone they know in their community—a neighbour, relative or acquaintance in
town whom they can trust and with whom they can comfortably share their needs.
FinMark Trust and UNCDF-Making Access Possible, FinScope Survey Highlights: Laos 2014, p.9 (n.p., November
© UNCDF MM4P
Agriculture is the backbone of the Lao economy, but farmers are
dispersed, living in remote, rural areas throughout the country. Travelling to
a district town can be an undue burden for them, and accessing formal financial
and banking services is even more difficult both because of the distance to a
bank branch and because of insufficient income and low financial literacy.
These challenges have understandably led farmers to depend on cash. For them,
sending money to family members in other provinces by a bus driver is a method
often used, but it is time consuming and sometimes risky.
Sompong Veosy, a farmer from Souvannaphoum Village in Paklai District,
grows rice and raises buffalo and cows for his income. He normally spends all
day looking after the rice paddy and livestock, only leaving his farm after
sunset. Taking time from his work to travel to town to complete a transaction
is exhausting. But, since a BCOME agency in his village opened, his outlook has
changed. “In the past, I had to travel a long way to send money to my children
for their education, but now it is easy, fast and convenient. I am very, very
happy now. It is perfect,“ he explained with a happy smile.
Sompong Veosy, a farmer from Souvannaphoum Village in Paklai District.
© UNCDF MM4P
The BCOME service has drawn this new customer segment to BCEL, which has
been surprised to learn just how much money from rural farming communities
flows throughout the country. Through the service, BCEL can stay close to these
new customers and learn about their requirements.
Thong Khoun, a villager from Thakokhai in Pakngum District, regularly
sends money through BCOME to her son who is studying in the southern part of
the country. Sometimes, though, it is the opposite: she has an urgent expense
of her own, and her son sends money back to her. “My son asked me to open a
bank account so that he can send money to me in the future. So, I wish that
BCOME can open the account here. It is convenient because it is close to our
house,” Ms. Khoun explained. “I used to ask the agent if I can open my account
with her. I want to save money, and I also want to have an ATM card. I feel
that I don’t want to carry cash anymore. If I have a card, wherever I go I can
withdraw money from the machine—that is what I want now. If we can open the
account with BCOME, it would be wonderful,” she added.
BCOME is not only a solution for farmers to support their children’s
education, it also allows them to have more opportunities to trade their
products more broadly—helping them to break free of poverty. It helps farmers
increase their income by providing a quick and easy payment system. BCOME
responds directly to the needs of communities with a service that old-fashioned
banking cannot provide. Siavone Phomavong, an agent in the capital city of
Vientiane, shared an example: “I have a customer who sells organic vegetables.
He sends money to buy them from farmers in Pakse, Champasak Province.” The
BCOME service assists the growth of agribusinesses, as the money from buyers in
the main cities flows out to farmers in the provinces, where the farmers can
save and re-invest for better techniques and more productivity.
The access afforded by branchless banking does not only support
education of farmers’ children and their agribusiness, it is also suited to
many different types of business requirements, such as paying for insurance and
making monthly payments for the purchase a car. Early adopters who have
experienced the efficiency of the first branchless banking service in Lao PDR
have greater understanding of the new system and value the system more. It
benefits them in many ways, relieving stress in their lives and reducing the
time and the cost of transactions, which in turn gives them a chance to save
and thereby prepares them to take a first step out of the poverty trap.
In the future, BCOME will continue to grow with new product and service
offerings and to play an important role in accelerating the growth of all kinds
of businesses. The convenience and accessibility can be applied to any customer
segment, from low-income populations who deal in small transaction amounts to
large organizations that can network with people in any isolated region. These
advancements will contribute to a greater number of people improving their
livelihood by using a low-cost, easy and friendly system, which will drive the
economy of the household and in turn the communities that form the core of the
This is the second blog post of a series about the dawn of digital
financial services in Lao PDR. Read also "Agents—The revolution on the ground in Lao PDR" for an
June 2017. Copyright © UN Capital Development Fund. All rights reserved.
The views expressed in this publication are those of the author(s) and
do not necessarily represent those of the United Nations, including UNCDF, or
their Member States.
 Lao People’s Democratic Republic, Ministry of Education and
Sports, Education and Sports Sector Development Plan (2016–2020) (Vientiane,
 FinMark Trust and UNCDF-Making Access Possible, FinScope Survey Highlights: Laos 2014 (n.p., November 2015).
For more information, please contact:
KM Consultant, Lao PDR
DFS Expert in Lao PDR