Promoting digital innovation for inclusive and sustainable remittance markets

Organized by United Nations Capital Development Fund (UNCDF)

UNCDF is the UN’s capital investment agency for the world’s 48 least developed countries. It offers finance models that help unlock public and private resources in support of local economic development. UNCDF identifies market segments where innovative financing can have transformational impact in helping to reach the last mile and address exclusion and inequalities of access.


UNCDF takes a three-pronged approach to supporting local economic development:

Provide technical assistance (TA) to local FSPs in three areas: policy and advocacy, capacity building, and human-centric product design;

Facilitate strategic partnerships among providers, and support the transition from cash to digital transactions in order to create an integrated financial market; and

Supply risk capital to encourage public and private sector stakeholders to innovate.

Recently, UNCDF issued the Mekong Remittance Challenge Fund as a way to promote digital innovation for remittances in Southeast Asia. Remittances from Malaysia to Cambodia, Lao PDR, Myanmar and Viet Nam (CLMV) amount to US$17 billion a year through regulated transfers, and likely another US$6-17 billion through unregulated channels. The Challenge Fund is designed to entice fintech companies to develop innovative business models that foster use of regulated remittances to CMLV. UNCDF provides matching co-funding to get these projects off the ground. The primary objectives of these projects are to improve adoption of low-cost digital financial services, to link remittances to saving and / or with insurance (e.g. funeral, accidental disability, accidental death).

The goals are to prove these innovations are effective, financially viable, and scalable. While some projects are still in the initial stages, at least one has already shown definitive results, with many migrants gaining access to insurance products through remittance services.


From UNCDF’s efforts, several lessons for FSPs are clear:

  • Digitize remittances to reduce costs and improve access to rural areas;
  • Link remittances to other products, such as savings, insurance in order to increase product use and overall financial awareness.
  • Form partnerships with digital innovators to leverage their knowledge and expertise.

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