Linking Remittance Through Mobile Financial Services. FSD Conference- Zambia November 14, 2017

Transcription

1 Linking Remittance Through Mobile Financial Services FSD Conference- Zambia November 14, 2017

2 Migration & Remittance in Nepal at a Glance Remittance Income is the largest contributor to Foreign Exchange for Nepal 1 st Annually, around 400,000 workers go to overseas countries as migrant workers 7.1% of total population are in overseas countries as migrant workers In terms of contribution to GDP, Nepal s ranking among the countries in the world 3 rd Destination Countries UAE 14% Other 10% In terms of volume, Nepal s ranking as remittance receiving country in the world 23 rd Saudi Arabia 19% Malaysia 25% Qatar 32% Data Source: Various Publications of NRB Picture Source: CNN 2

3 Remittance at a Glance How much do the migrants send back? Inward Remittance contributed 26.8% of GDP Average ticket size of remittance is USD 446 A typical migrant worker will send remittance every 1.94 months Source: Various Publications of NRB & World Bank Remittance inflow in last three years (USD Billion) FY 2014/15 FY 2015/16 FY 2016/ Average Cost of sending remittance: Malaysia-Nepal 2.71% Qatar-Nepal 5.19% Saudi Arabia-Nepal 3.45% UAE-Nepal 3.32% 3

4 Remittance Income & Household Dependency 38.4% 18.8% 80.8% For 80.8% of the households, Other sources of income are not adequate to meet household expenses, without remittance income For 38.4% of the households, remittance is the main source of income 18.8% of the households are totally dependant on remittance income 4

5 Remittance & Formal vs Informal Channels 90.9% (banks/remittance companies) Gulf countries 96.2% Malaysia 94.1% Korea Less than 20% Formal Channel 9.1% (5.9% use Hundi) Informal Channel 5

6 Use of Remittance Income Health & Education 10% Day to Day Expense 24% Others 13% Savings 28% Loan Repayment 25% Use of MFS will not only helps receiving remittance through formal channels; it also helps maintaining the remittance funds in the financial system Less than 1% of households have subscribed to the Foreign Employment Bond issued by the Government. Total claim on the bond is around GBP 1.7 million. 6

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8 Why Link Remittance with MFS? IME has over 25% market share with 50K footfalls every day; they have a captive customer base of over 1 million associated with their group Strong and active Agent Network of 7,000+ throughout nation Provides Gateway to bank accounts from IME Wallet through National Clearing House- NCHL Enhances the possibility of Savings, Loans and other banking products; partly reduce IME daily cash distribution of NRs 1 billion IME Pay is Bank and Telco Agnostic and can accommodate customers from all segments Incentivise the senders with paying agent commission; mobile wallet usage costs cheaper than banks and remittance agents 8

9 What has been Achieved So Far? First Licensed Payment Service Provider (MFS) Integrated, Connected and live with NCHL covering 200+ BFIs 10,500+ IME Pay Touch Points in pilot phase itself 200+ IME Pay Merchant Touch points IME Pay Customers (Pilot Phase) 25% of High value Customers. 75% Target Value Customers Partnership with 2 largest Telecoms for pipeline services Use of PIN for ease out OTC transactions Web, App and USSD channels supported 9

10 What is Happening Next. Enhance focus from Agent assisted to self initiated transactions Focus on activating 11,488 + Touch Points through OTC transactions Focus on widening of merchant network to reduce need of cash payment Further acquiring and activating 10,000 IME pay Touch Points Conversion of 750,000 + customers registered with IME remittance [Known customers] Integrate IME Pay with more Billers- nationwide Support GON plan in distributing social security grants in all 753 local governments through IME Pay Focus on creating at least 250,000 + users [Unknown customers] The ratio of active customers to be reached to 40% by 2019 Integrate IME Pay with Telcos in major International Corridors Strategically shift towards Customer Centric Activities from the initial Agent Centric Activities 10

11 Lessons Learned & Challenges Lessons Learnt Small scale silo MFS distract market focus Challenges Educating the masses on adoption of Mobile Money 3 rd party solutions have demonstrable effect when Telcos are not prepared for MFS rollout Wider Agent Network and adequate assistance/facilitation are important in adoption of MFS for rural populations Third-party led models create a buzz in the marketplace Geographical terrain and fragmented populations Global trends related to negative growth of Telco revenue may hinder technology enhancement 11

12 Strategy to overcome challenges MNOs Opening of USSDdiscussions underway Leveraging on Telco Agent Network MFS Initiatives Strategic partnerships being forged with leading MNOs and Banks Aggressive agent network expansion underway Capitalizing on the remittance agent network Focusing on behavioral changes with beneficiaries to expedite MFS adoption Banks Linking to bank accounts through Clearing House (NCHL) MFI Remittance linked savings and loan products developed with MFI Offer loans against group guarantee based on actual need for migration cost Repayments also linked with remittance Remittance services also bundled Revised Personal Savings and Microenterprise loan to attract migrants/returning migrant worker With Sakchyam support UNYC Nepal is targeting to provide this service to over 81K beneficiaries in western part of Nepal In another partnership with NWCSC, Sakchyam developed migration loans and entrepreneurship loans have already been distributed to over 2000 beneficiaries from 16 branches run by NWCSC. 12

13 Inclusive MFS Collaborative Model The Eventuality Major Stakeholders Nepal Telecom Authority & Nepal Rastra Bank - Regulator Agent/ Merchant Network IME Pay and others Telecoms Nepal Telecom and Ncell Banks & Financial Institutions - Financial service providers Nepal Clearing House Ltd. - System operator Collaborative Model of MFS in an national retail payments Eco-system Establish or rather leverage the existing national mobile payment infrastructure and mandate interoperability between mobile payment system and network of merchants / agents Business collaboration between NCHL, banks, NTC, Ncell & other stakeholders Payment infrastructure at NCHL, a neutral institution Maintain SLA for all infrastructures including that of telecom and other stakeholders Service delivery from multiple channels of banks, telecom, remittance companies, agents & merchants Operate under existing regulatory framework of NTA and NRB and regulator collaboration 13

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