Greater co-ordination of Sri Lanka’s two mobile phone money transfer systems could help expand distribution networks in rural areas, a new study on how fintech can improve the development impact of labour migration has said.
Regulators are looking to digitalized economic activity as a driver of growth, the study by the Asian Development Bank Institute, Organisation for Economic Co-operation and Development, and International Labour Organization said,
Given the complex nature of digitalization, more measures are still needed, said the report on labor migration in Asia and how to increase the development impact of migration through finance and technology.
The study, which covered Bangladesh, Nepal, and Sri Lanka, said that despite the bank account penetration differences across these countries, regulations across all three markets are converging on a more conducive environment for money market agents.
Measures suggested include developing more instruments and infrastructure for e-payments and agent banking, and creating a transparent legal framework and regulations for digital finance.
It suggested that Sri Lanka expand distribution networks in rural areas, perhaps through coordination of the two eZCash mobile network operator as part of measures to improve the mobile money and agent banking ecosystem.
Sri Lanka could encourage traditional instruments such as payment cards as a first step in leveraging high account penetration.
It could also target greater payment service provider (PSP) profitability through new services, partially by decreasing over the counter, which increases fees incurred.