Why is financial inclusion important for the LMI segments of society?
Vietnam is a lower middle-income country. On average, over 70.38% of its population earns less than USD 10 per day. The government wants to work for LMI communities across the country to improve their financial health so that people can plan, save money for future investments, and borrow to start businesses.
The use of DFS would leverage the digital transformation in the banking sector to create quick access to digital financial services, such as internet banking and mobile banking for the LMI segment". — Mr. Pham Xuan Hoe, Deputy Director of Banking Strategy Institute, State Bank of Vietnam
How can service providers improve the customer experience to lower the usage thresholds for DFS?
Some of the barriers that were highlighted in the event:
- A strong preference for cash
- The high cost of providing financial services
- Low digital financial literacy
We propose that understanding the attitudes and preferences of the LMI customers towards digital modes of payments will help the providers to address essential aspects of the customer adoption journey. This spans creating awareness, generating user interest, and improving customer experience—leading to trust in digital channels.
The cooperation with MicroSave Consulting at the i3 program would help VBSP to raise digital financial literacy for the poor. I hope that this would accelerate economic opportunities for low-income households and women-led microenterprises.” - Mr. Bui Quang Vinh, Deputy General Director, VBSP
What drives the business case for the private sector and the government to use digital solutions to serve LMI customers?
FinTechs that provide services, such as mobile wallets & QR code payments, will be important for financial sector development as they can be deployed faster than traditional banking services.
We may expect technology-driven and innovative solutions to emerge in the country through active collaborations between FinTechs and incumbent financial service providers. This is especially considering the government’s push towards a cashless economy by 2020, a growing FinTech sector, and increasing customer preference for electronic payments.