Please describe your proposed solution.

<u>Context</u>

Laos is one of the poorest countries in Southeast Asia although with a massive wealth divide, poor physical and technological infrastructure, and challenging mountainous terrain. Laos also has a very weak payment systems, and many challenges for distribution of financial inclusion to rural vulnerable populations (including pregnant women and children, landmine victims, and impoverished people). Furthermore, Laos does not have a national digital ID system. Identification is an important component when considering social welfare transfer payments to these populations.

<u>Status</u>

Rural village banks provide financial services to those populations otherwise excluded from the financial industry. Recently, 7 village banks were digitized with industry-standard core banking software, and currently have enrolled 212,285 people across 842 rural villages. This digitized village bank system is integral to strengthening the rural banking system to provide services to the remote regions of Laos, and it provides a solid digital platform and, importantly, an established rural social network to incorporate a uniformed identification system.

<u>Solution </u>

A robust blockchain ID system integrated across the village banking system and connecting to the banking system would reduce friction in the system for social transfer payments, reduce fraud opportunities, ease identification of vulnerable people such as mothers and children, mine victims, elderly, and other vulnerable populations. This would help both internal governmental organizations and international aid organizations. The process of identifying and matching social welfare recipients would be more efficient and would be able to better evaluate the value of the risk and more precisely estimate the required aid amounts. Greater transparency and auditability of the system would increase trust and confidence that the funds are being allocated and distributed appropriately. A strong ID system is a beneficial component to scale the digital banking solutions to other provinces and districts and even to utilize international remittances from migrant workers sending money back home to their families.

Another phase of the project would incorporate blockchain transfer mechanisms and smart contracts to allow accessible and simplified wallets to exchange digital money for physical goods and services, and incorporate smart contracts to automate the fiat reconciliation process. This would reduce the intentional and unintentional bookkeeping errors and fraudulent activities amongst a low-technologically capable population.

Please describe how your proposed solution will address the Challenge that you have submitted it in.

There is very little understanding about blockchain in Laos, and blockchain is generally associated with cryptocurrencies which are seen as a risk to the local currency and banking systems. This will raise the awareness of Cardano and blockchain solutions as a method to increase transparency and efficiency.

The digitized village banking system is proving successful. If integration of a Cardano ID system is also successful, awareness of the blockchain solution will be recognized by government agencies, and international organizations such as World Food Program, UNICEF, ILO, and others that we are collaborating with.

Integrations with the banking sector will further increase the utility & adoption of Cardano - not only for Laos, but potentially also for neighboring countries.

What are the main risks that could prevent you from delivering the project successfully and please explain how you will mitigate each risk?

Education is difficult and costly. People will need to be trained on how to use a mobile wallet, and why an identification system is necessary and can benefit them. The village banking system has a multiplier effect by providing a platform for financial literacy education that is already of use to the villagers. Every day they deposit safely and have access to loans on the platform.

Money is usually trusted with a banking system, not with electronic devices or telecom companies. Integration with a village banking system that already has local social networks with the banking system and international remittance will be a boost for financial inclusion.

There is low cellular network coverage. The village banking system has built a synchronization tool that synchronizes information before and after going to remote destinations without internet reception. Low penetration of smart phone ownership is a challenge, but technology is advancing.

Please provide a detailed plan, including timeline and key milestones for delivering your proposal.

Month 1: Familiarization with Cardano ecosystem (identifications, wallets, and transfer mechanisms).

Month 2-3: Design requirements and specifications for the integration layer and wallet,

(ensuring compatibility with the existing banking systems and microfinance platform)

Month 4- 7: Simplified mobile wallet development & Testing

Month 6 - 9: Integration with banks and Testing

Month 10-11: Training of Trainers (wallet, KYC analysts, international remittance)

Month 12: Full Go Live

Please provide a detailed budget breakdown.

M 1: Familiarization with Cardano ecosystem = USD 6,000

M 2-3: Design requirements & specifications for the integration layer & wallet = USD 11,000

M 4- 7: Simplified mobile wallet development & Testing = USD 23,000

M 6 - 9: Integration with banks and Testing = USD 22,000

M 10-11: Marketing, Training of Trainers (wallet, KYC analysts, international remittance) = USD 9,000

M 12: Marketing / Full Go Live = = USD 3,000

Documentation = USD 5,000

Project Mgmt = USD 6,000

<u>Total = USD 85,000 </u>

Prices include Wages / Freelance rates for some international advisors, that are needed to upgrade the knowledge in Laos. Plan is to staff 90% of overall man days with Lao staff.

Please provide details of the people who will work on the project.

Lattana Keosihavong, Laotian. Marketing Director and owner of LTS Ventures, a Vientiane based fintech company with 8 employees. Lattana is a certified Lao professional investment banker and she has a diploma in business administration. Her role is to work in t he provinces and in Vientiane to guide and direct projects, and liaise with the Lao government and NGO.

https://www.linkedin.com/in/lattana-keosihavong-636188142/

Tim Scheffmann, German, CEO of LTS Ventures. Tim has a Masters of Banking and Finance from Frankfurt, and a Bachelor of Business Information Systems from Karlsruhe. Tim brings over 20 years of experience in the retail and private banking sector (Credit Suisse) with deposits, loans, saving, and accounting, and IBM as a senior executive consultant with Swiss core banking systems. He has worked in Zurich, New York, Hong Kong, Singapore, Myanmar, and Laos. In 2017, Tim won the 3rd place in a Bangkok UNICEF Innovation Funds blockchain hackathon for an innovative financial inclusion model, including a blockchain wallet usable by rural children, mothers, ministry employees, and healthcare workers.

<https://www.linkedin.com/in/scheffmann/>

Thipphasone Xoumsong (Ko), Laotion. Development Lead and full stack senior software engineer of LTS. He coordinates a team of four developers. The core programming team are from various regions of Laos, and have a personal stake to enable financial inclusion for members of their community.

<https://www.linkedin.com/in/thipphasone-xoumsong-ba4031224/>

Sonesak Sehavong, Laotian, COO of LTS - Infrastructure, Network and Contracting

<https://www.linkedin.com/in/sonesak-sehavong-9701231a4/>

Additionally on this project will work from LTS:

1 DB Admin

1 Logic layer developer

1 GUI designer and web programmer

We plan to hire a short term consultant to guide us in Cardano repositories and established contracts/ banking protocols.

If you are funded, will you return to Catalyst in a later round for further funding? Please explain why / why not.

Our idea is scalable not only within Laos, but across South East Asia. We have a strong network across all South East Asian countries. If the first round is a success and scalable as predicted, we would return for further funding to establish the solution in neighboring countries.

Please describe what you will measure to track your project's progress, and how will you measure these?

Progress will be measured by hitting the milestones at each phase. During the development phases, the programming commits will be monitored, and weekly update meetings will ensure the project is on track. Early and regular customer feedback from villagers and also banks will help to track towards a successful solution.

During the training and implementation phase, we will monitor the number individuals who have been trained and educated, the number of ID's converted, new ID's registered, new Cardano wallets registered, number of transactions with the banking and remittance systems, and ultimately the amount of value transacted over the Cardano system.

What does success for this project look like?

A successful project would integrate the Cardano ID systems and wallets into the existing village banking system and connect to the traditional banking system. Bank customers would upgrade their ID in the village banking system, and wallets would be able to transact value to and from the village bank using Cardano infrastructure in connection to domestic / global transactions and remittances.

After successful training, launch, and usage period, we would showcase the successes of the Cardano project to interested organizations who we already have successful collaborations with including UNICEF, ILO, World Food Program, and the World Bank.

Seeing the success of the Cardano solutions, we expect that it would lead to greater understanding of Cardano and blockchain solutions. This would hopefully lead to further development work such as full blockchain integration and networking between the village banks, developing a network of payment channels for organizations to transfer value directly to the end target, and developing Forecast Based Financing smart contracts which would use oracles to predict when and where emergency aid will be required and transferring the value ahead of the emergency.

The solution is ready to be scaled in other countries.

Please provide information on whether this proposal is a continuation of a previously funded project in Catalyst or an entirely new one.

Entirely new one.