Laos fintech gives village banks, financial inclusion a timely boost
Three years ago, LTS Ventures was tasked with building a simple microfinance platform for Laos’s army of village banks and savings unions. It took off like a rocket, boosting financial inclusion, cutting fraud. Now the firm is eyeing fresh external funding and expansion across southeast Asia.
When Tim Scheffmann co-founded Laos-based LTS Ventures three years ago, he had a goal that continues to elude many well-meaning policymakers across large swathes of southeast Asia: to drag financially excluded citizens into the formal banking system.
“My main motivation was and is to financially include people,” the chief executive of the Vientiane-based fintech tells Euromoney. “I have been in the region for 10 years. I created a mobile-money startup in Myanmar and a blockchain-based remittance company based in Bangkok. Then this comes along.”
Our customers are from rural areas, so if a system is over-sophisticated, it won’t work in any meaningful way
‘This’ was a contract awarded by German development agency GIZ in 2019, to build a simple and reliable platform it could place atop any of the country’s 6,000-plus village banks and 122 microfinance institutions (MFIs), plus countless domestic savings and credit unions, to help them reduce risk and cut fraud.
With his Laotian co-founders – managing director Lattana Keosihavong and chief operating officer Sonesak Sehavong – Scheffmann created ‘Lan Xang Banker’, named after the old name for the country, which means ‘a million elephants’.
A shared microfinance platform that works online and offline, Lan Xang’s blockchain-like technology automatically synchronises records between central servers and laptops operated on the move by staff, giving more than 225,000 villagers better access to finance.