Laxmi Bank and New Street Tech, a blockchain enterprise based in India and the Middle East, announced joining forces to deliver data driven remittance-linked financial services with investment and technical support from the UN Capital Development Fund.

This partnership is further supported by Al Fardan Exchange, a global money transfer operator based in the UAE, to explore the role of technology in achieving the sustainable development goals.

Blockchain, a distributed ledger technology, is a secure platform where parties can communicate seamlessly. Blockchain is an integrated ecosystem characterised by meaningful partnerships across countries and enables regulations, innovative, customer-centric financial products and services and well-coordinate delivery mechanisms.  

This holistic ecosystem can have tangible impacts for financial inclusion by reaching the unbanked and under-banked in a convenient, secure and cost-effective manner.  

This project will not reinvent the wheel around products, but will introduce tweaks and risk-mitigating features within product design and delivery, achieving the twin objectives of reducing credit risk for financial service providers and being meaningful to the end user. For example, a simple credit product against the securitisation of remittances is a meaningful use-case for banks and customers alike.

On the supply side, this partnership is exploring the use of MIFIX, a blockchain-enabled lending ecosystem hosted by New Street Tech, to facilitate information exchange between stakeholders in the Nepal-UAE corridor with a seed fund of $2 million from Unitus Ventures.

On the demand side, Laxmi Bank, with the UN Capital Development Fund’s technical assistance, will design and deliver customer-centric financial products and services that best reflect the realities and aspirations of migrant workers and remittance recipients.

“We are keen to explore and implement blockchain technology to further improve the delivery of financial services in Nepal,” said Ajaya Shah, CEO of Laxmi Bank. He added that this partnership would help to unlock the potential of technology in the remittance sector.

MIFIX leverages blockchain technology to deliver financial services to the population excluded from mainstream financial services, said Sajeev Viswanathan, CEO of New Street Tech. “This partnership with Laxmi Bank and Al Fardan Exchange, supported by the UN Capital Development Fund, is a global first in the remittances industry,” he said.