Responsible Finance Forum

Remittances as a Driver for Women’s Financial Inclusion

UNCDF and Shift

With the rapid development of the financial markets of Cambodia, Lao PDR, Myanmar and Vietnam, there has been significant growth in inflows of international remittances, which totalled US$17 billion in 2015 to these four countries, well outpacing the US$6.8 billion inflow of Official Development Assistance (ODA) (World Bank 2014).

At the macro-economic level, these international remittance flows provide much-needed foreign currency exchange, stabilize the balance of payments, supplement ODA and reallocate capital resources to more productive investments and other financial services—moving money from international to domestic, consumption to investment, and from urban to rural. The global trend of formalizing cross-border remittances through digital channels results in more convenient, less expensive and less risky payment services, and creates opportunities through mobile wallets to enhance the use of other financial services (UNCDF 2016). Digitizing international remittance flows may not only reduce remittance transaction costs by over 50 percent (GSMA 2016), but it can also help smoothen consumption patterns, increase remittance recipients’ household income and support women’s economic empowerment (Beuermann et al. 2014).

The purpose of this study is to identify some of the key barriers at every step of the remittance value chain from the sender to the receiver. It explores the formal and informal remittance markets in Cambodia, Lao PDR, Myanmar and Vietnam, and identifies innovative solutions to cross-border payments and tailored financial products that can address the identified barriers and advance women’s financial inclusion. The solutions identified by Mekong remittance service providers (RSPs) can feed into evolving business models and partnerships that can add value for customers, particularly women. This study also provides recommendations for eliminating some of the regulatory and market barriers that limit women’s access to and use of financial services.