Laos and South Korea are joining forces in a pilot project to facilitate the process of cross-border money transfers for Lao workers abroad and foreign workers in Laos.
This move comes as Lao employees abroad often face numerous barriers when dealing with cross-border money transfers, including difficulties in opening foreign bank accounts, complex transfer documentation procedures, and high transfer costs.
These challenges have led to the use of unauthorized and often risky money-transfer channels, frequently resulting in unfavorable exchange rates and unscrupulous brokers that can harm the interests of Lao workers abroad.
To overcome these hurdles, the Ministry of Labor and Social Welfare, in conjunction with the Bank of Lao PDR, has long been researching effective mechanisms, tools, and payment channels. The goal is to create a more convenient system for workers sending money back to Laos through the banking sector.
Such a system will not only simplify the process but also enable the government to monitor transactions, collect data, and formulate more effective policies and management procedures. Made possible through a partnership with the Lao Foreign Commercial Bank and South Korea’s Global Loyalty Network Company (GLN), a global integrated platform that offers cross-border use of digital assets and benefits around the world, a pilot project will initially target South Korea. But future plans are to expand the model to other countries such as Thailand and Japan.
This collaborative effort marks a vital step toward improved financial management for Lao workers abroad and foreign workers in Laos. It also promotes the use of formal banking channels, enhances currency stability, and reduces potential gaps in public sector management that could impact the national economic system.