UKaid सीप’s partnership with Laxmi Bank, since May 2021, is enabling expansion of a new and improved technology- and-remittance-based credit product, collaborations with key institutions in the national and international migration system, and integration of skilling and inclusion in the Bank’s operations to better and directly reach and service migrant households and communities.
Perspectives of the CEO: Conversation with Laxmi Bank’s Ajaya Shah
1. Why do you think innovations in technology and financial products matter? What has the Laxmi Bank done in this regard—what was its experience?
Innovations in financial technology makes banking and money management easier and safer for customers at the same time creating efficiency in terms of cost and capability for financial services providers like banks. It is a classic example of getting more done with less – saving time and money or money and time, however you want to put it. At Laxmi Bank we consider ourselves the banking industry’s ‘explorers’ when it comes to trying out new technologies and channels. It is true that not all ideas and initiatives work but we learn from every failure and come out stronger and wiser. We introduced mobile banking in Nepal way back in 2005 through SMS alerts. That was when SMS was not even considered a reliable communication channel. Similarly, we introduced the concept of mobile wallets in 2011 via Hello Paisa, which did not succeed, but led the way for other players in the market and today we see many fintechs offering wallet-based services.
We recently announced a partnership offer inviting fintechs and other interested partners to join us through our API Banking platform, enhanced through UKaid सीप’s support. I believe this will further encourage innovation and expedite roll out of products and services for the benefit of our common customers. Today we continue to enhance and strengthen capabilities of our core digital banking channels such as mobile and the internet – balancing convenience with security.
We recently announced a partnership offer inviting fintechs and other interested partners to join us through our API Banking platform, enhanced through UKaid सीप’s support. I believe this will further encourage innovation and expedite roll out of products and services for the benefit of our common customers. Today we continue to enhance and strengthen capabilities of our core digital banking channels such as mobile and the internet – balancing convenience with security.
The banking sector is well positioned to meet the demands of the consumers and service providers for P2B to take off in a major way but there are few challenges that need to be overcome such as data cost and quality of connectivity. On the other side, the businesses need to upgrade their own capabilities to offer frictionless buying and paying experience for consumers. Apart from offering solutions, I believe that banks must also invest in promoting digital literacy especially to the customer segment that are not digital natives. While QR Code is a great example of simplifying payments, we need wider adoption in other areas such as utility and bill payments.
3. What aspects of the Bank’s partnership with UKaid सीप are you most excited about and why?
We are excited about the possibility of bridging the identified gaps in the market primarily for migrant households: migration loans, remittance loans and loans for returnee migrants. While we understand some of these demands are already being met by formal or informal participants in the market, this partnership will help us offer technology-based products and solutions and a phygital approach that can replace high-cost, high-risk transactions that under-served borrowers typically engage in. I am confident that the experience of Laxmi Bank group and the technical expertise of UKaid सीप will result in a meaningful access to finance for the migrant households.