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Bringing Banking Services to Rural Vietnam with MFast

Photo of Mr. Duy

In the Mekong River Delta, where clean water is scarce, Mr. Duy, a factory worker in his mid-forties, faced health issues due to kidney stones. With a modest income of 9 million VND ($380 USD) per month, he could not afford the 17 million VND ($720 USD) water purifier that could improve his health. This is where MFast stepped in. MFast is a digital platform designed to help people in rural Vietnam access financial products, including loans, insurance, and bank accounts, making essential purchases more accessible.

Photo of Mr. Duy
MFast recognizes that residents in Tier 2-3 cities such as Mr. Duy face challenges in accessing high-quality financial services and purchasing high-ticket items

Bridging the Financial Gap in Rural Vietnam

MFast understands that residents in Tier 2-3 cities, like Mr. Duy, face significant challenges in accessing high-quality financial services and making large purchases. Through MFast, Mr. Duy was introduced to a water purifier on an instalment plan, making it affordable. Three months later, his health improved and he no longer had kidney stones, and he expressed deep gratitude for the purifier & for the agent’s assistance in helping him obtain the needed financing. For Ms. Hang, the MFast agent who assisted Mr. Duy, it was a rewarding experience, knowing she had made a positive impact on his health & happiness.

“A lot of our rural consumers, like Mr. Duy, have no natural need to open a bank account. They are perfectly happy to keep & transact in cash. Their journey with a formal financial institution starts with a loan for their family goals, health, business, wedding, or home repair. In order to receive that loan and make repayments, they need a bank account. This gradually integrates them into the traditional banking system.”

– Phan Thanh Long, founder of MFast.

From Call Center System to Financial Platform: The Birth of MFast

MFast was founded in 2017 by Phan Thanh Vinh and his twin brother, Phan Thanh Long, who grew up in Binh Phuoc, a small town in Vietnam near the border of Cambodia. They are well aware of the challenges faced by people in rural areas—limited access to finance, poor infrastructure, low incomes, and difficulties in getting healthcare, education, clean water, and good jobs. The idea for MFast was born out of the Phan brothers’ experience running a call centre system that connected banks with customers. From being a software solution company, they ventured into using their own system to do the sales themselves.

Today, MFast has served nearly 2 million end-consumers with 160,000 freelance agents, and 50 rural points of sale. The platform helps even the most remote communities access financial products like loans, credit cards, and insurance. The agents are local from the same communities they serve, acting as trusted financial advisors.

“We specialize in serving the under-credit community, which represents roughly 70% of the population in both Vietnam and the Philippines. Our focus is on bridging the access gap in consumer finance, thereby enhancing financial inclusion,”

– Phan Thanh Long, Founder of MFast.

Photo of Phan Thanh Long, Founder and Minh Quan Dang, CFO at the MFast office
MFast office in Ho Chi Minh meeting Phan Thanh Long, Founder and Minh Quan Dang, CFO

Agents Driving Financial Inclusion: The Key to MFast’s Success

One of the key elements of MFast’s success is its network of local agents, who are integral to building trust and ensuring that financial products reach those who need them most. These agents are not just salespeople; they are community members who understand the specific needs and challenges of their neighbours.

MFast operates on a straightforward yet powerful model: it connects financial institutions with this network of agents, who distribute financial products to consumers in underserved areas. These agents play a crucial role in expanding access to financial products. Unlike traditional banks with limited offerings, MFast provides agents with a diverse portfolio of financial products, maximizing their income opportunities and better serving customer needs.

Take Ms. Hang, for example. A former teacher turned MFast agent, Ms. Hang chose to work with MFast because it offered her access to opportunities she could not find elsewhere. Her role goes beyond selling financial products; she provides guidance and support, helping clients like Mr. Duy navigate their financial options. Ms. Hang’s decision to join MFast has also transformed her career, allowing her to manage a team of 12 sales personnel within a larger group of 500. Her story reflects the broader impact MFast has on both its customers and its agents, offering a pathway to financial stability and career growth.

Photo of Ms. Hang, an agent from Tay Ninh province
Picture: Ms. Hang, an agent from Tay Ninh province upon the interview at the MFast office in Ho Chi Minh City. The MFast logo resembles a wallet, symbolizing financial prosperity. When folded, the wallet turns into a heart, representing MFast’s commitment to caring for the communities it serves.

“The conditions at banks are very unfavourable for our customer segment. For example, a public school teacher may need to get a stamped approval letter from the school principal to borrow from a bank. People are not ready to disclose their financial needs in that way. MFast makes it easier—everything is done online, which is crucial for those who find bank processes too complicated,”

– Ms. Hang, an agent from Tay Ninh province.

The MFast platform is designed to be user-friendly, making it easy for agents to register, manage their profiles, track income, and access essential tools. The instant withdrawal feature, integrated with digital banking, allows agents to access their earnings immediately. They can also use their earnings to pay bills or purchase utilities at discounted rates.

“Just as Uber allows anyone to become a driver, MFast enables anyone to become a financial advisor. We build a platform where anyone from any background can join, perform simple tasks, and earn income. Over time, they can become more skilled and take on complex financial transactions, making MFast a community-driven platform,”

– Phan Thanh Long, Founder of MFast.

Agents earn an average of $160 USD per month, with top performers making more than $2,000 USD. For every successful product distribution, MFast takes ~30% and pays ~70% of the commission out to the agents.

“Our end-user app, MFast360, serves as a CRM and customer service tool, allowing customers to track their financial products and even become agents themselves.”

The platform’s eKYC process ensures that both users and customers are thoroughly verified, managing credit risk effectively. This trust allows agents to focus on connecting with customers and offering products that genuinely meet their needs.

One of the main challenges has been scaling the business while maintaining the quality of service. Managing a large network of agents and ensuring they receive proper training has been a continuous focus.

Strategic Investments and Partnerships Fuel MFast’s Growth

Since 2020, MFast has raised a total of USD $11m in equity financing from 7 fintech-focused funds from 5 different countries. In 2022, MFast became part of AVV’s investment portfolio, receiving $2.5 million in their Seed round, backed by Australian Development Investments (ADI). This investment allowed MFast to expand its network and improve its digital tools, including the MFast app, which enables agents to quickly sign up new users and manage customer relationships.

“MFast is actively seeking commercial & capital partnerships that align with our vision of financial inclusion. Specifically, we are looking for financial institution partners who need to acquire new customers in Vietnam and the Philippines, particularly in the retail and SME banking segments. We also seek big-ticket product owners such as appliance brands who want to distribute their products to unreached consumers in these regions. Additionally, we are interested in working with strategic investors with strong operating experience in direct sales networks and/or financial technology”

– Minh Quan Dang, MFast’s CFO.

Status of Financial Inclusion in Vietnam

Vietnam has made significant progress in expanding access to financial services over the past decade. From just 20% of adults having a bank account in 2011, the number grew to over 60% by 2021. Despite this progress, many Vietnamese still lack access to basic financial services, particularly credit, and there is a need to encourage more people to save, borrow, and use digital payments.

Charts showing Account Ownership, Gender Gap in Account Ownership, and Use of Financial Services

MFast addresses these challenges by making high-value purchases more accessible through financing options. Whether it is appliances, transport, tuition, or insurance, MFast helps customers acquire necessary items without the burden of upfront payments.

Expanding MFast’s Vision Across Southeast Asia

As MFast continues to grow, it is seeking strategic partners and investors who share its vision of financial inclusion. The company’s modular business model allows for flexibility and scalability, making it an attractive opportunity for financial institutions and product owners.

MFast’s commitment to underserved markets extends beyond Vietnam. In just 108 days, MFast successfully expanded its operations into the Philippines and started generating revenue, replicating its model to serve another under-credit population. This rapid expansion underscores the scalability of MFast’s approach and its potential to transform financial inclusion across Southeast Asia.

The company has introduced new products like MTrade PayLater, which allows consumers to buy big-ticket items with down payments and is preparing to launch M2M, a cash loan product, and a co-branded debit card with a bank.

MFast’s vision is to expand its services across Southeast Asia, adapting to the changing needs of the market. The company plans to launch its Series B funding round in Q4-2024 to support market expansion and enhance product ownership capabilities.

“We plan to launch our Series B funding round in Q4-2024 to support market expansion and enhance product ownership capabilities. Our ambition is to serve people across emerging Southeast Asian countries, offering both simple & complex financial products, and the ability to earn & spend in one ecosystem”

– Minh Quan Dang, MFast’s CFO.
Photo of MFast's Startup of the Year award announcement at Fintech Asia 2024
MFast wins the Startup of the Year award at Fintech Asia 2024

MFast’s impact and innovative approach have not gone unnoticed. The company won the Startup of the Year award at Fintech Asia 2024, a testament to its role in empowering communities and driving financial inclusion.

Sarona Asset Management, a global pioneer in impact investing, is dedicated to generating competitive financial returns alongside positive social and environmental outcomes. Our firm’s investment strategies focuses on fostering sustainable development by partnering with local entrepreneurs operating high-growth businesses in emerging markets that generate attractive returns for our investors while contributing positively to their communities. Our goals include empowering women, protecting nature, creating and enhancing employment opportunities, improving governance, and building strong communities.

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