UNCDF in Lao People's Democratic Republic




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The Challenge

In 1986, Lao People’s Democratic Republic (PDR) began its transition from a centrally-planned to a market-oriented economy amidst uncertain prospects for rapid and sustainable economic development. Despite considerable developmental challenges, Lao PDR is on an increasingly sustainable growth path, with the opportunity to build on reforms achieved so far. Over the past decade, poverty reduction has been addressed directly through service provision rather than through growth. Lao PDR’s 2012 Human Development Index gives the country a rank of 138 out of 187 countries.

How We Are Helping?

UNCDF has been helping Lao PDR to meet its development challenges through joint programming with UNDP on local development finance and inclusive finance.

A UNCDF-supported programme, Governance and Public Administration Reform - Saravane, was designed to pilot improved district-level public expenditure management and financing, and support the Government in implementing its inter-governmental fiscal relations policy framework. Recommendations and lessons generated from this programme fed into a second phase, known as Governance and Public Administration Reform for Strengthening Basic Service Delivery: District Development Fund component (GPAR/SBSD: DDF), which builds upon and replicates successful initiatives at central and provincial levels, and attempts to address policy concerns. UNCDF has also recently approved a new programme, Strengthening Capacity and Service Delivery of Local Administrations (GPAR SCSD), which aims to improving the capacity of the civíl service at national and sub-national level to better manage and deliver services to the poor.

In inclusive finance, since June 2010 UNCDF has worked jointly with UNDP to support the Bank of Lao in broadening access to land, markets and economic services. Making Access to Finance more Inclusive for Poor People addresses key issues of capacity and infrastructure at the macro, meso and micro level, improving the policy and regulatory environment while strengthening the financial sector infrastructure as well as the capacity of financial service providers.

In Detail

Project

Governance and Public Administration Reform for Strengthening Basic Service Delivery: District Development Fund component (GPAR/SBSD: DDF)
Goal To improve district-level public expenditure management and financing.
How
  • Supporting the implementation of the inter-governmental fiscal relations policy framework.
Period 2007-2011
Partners UNCDF, UNDP, Government of Lao PDR, Luxembourg, Swiss Agency for Development and Cooperation (SDC), World Bank
Total project cost and UNCDF contribution USD 10,343,083
USD 700,000
Project

Strengthening Capacity and Service Delivery of Local Administrations (GPAR SCSD)
Goal To increase capacity of local governments leading to better delivery of services which improve the lives of the poor, especially in rural areas.
How
  • Supporting local districts to establish specific MDG targets and monitor achievements against these; 
  • Through training in planning, budgeting and public expenditure management; 
  • Supporting the implementation of a Performance Based Grant system and a Capacity Development Grant.
Period 2011-2015
Partners UNCDF, Government, UNDP, Swiss Development Cooperation (SDC), the Global Environment Facility (GEF), Republic of Korea, Government of Luxembourg.
Total project cost and UNCDF contribution USD 12,568,800
USD 1,300,000
Project

Making Access to Finance more Inclusive for Poor People (MAFIPP)
Goal To improve access to land, markets and economic services.
How
  • Addressing capacity and infrastructure challenges at macro, meso and micro levels; 
  • Creating an empowering policy and regulatory environment; 
  • Improving financial sector infrastructure.
Period 2010-2014
Partners UNCDF, UNDP.
Total project cost and UNCDF contribution USD 7,012,189
USD 1,443,982
Project

MicroLead
Goal To increase access to financial services, particularly savings, by supporting the expansion of microfinance savings-led market leaders in underserved countries.
How
  • Offering grants and loans that incentivize leading providers to start up new, or strengthen existing financial institutions that target low-income people, especially with savings, in underserved areas, particularly countries struggling to recover from crisis and conflict;
  • Through a competitive process to select leading indigenous microfinance providers from developing countries to expand their reach by implementing a variety of approaches including greenfields, transformations of MFIs to formally regulated deposit-taking institutions, and providing technical assistance to in-country MFIs;
  • Supporting technical advisors who work to help those providers to develop the institutional capacity to extend their reach.
Period 2008-2017
Partners UNCDF, Bill & Melinda Gates Foundation, The Mastercard Foundation, LIFT Myanmar.
Total project cost and UNCDF contribution USD 58,562,939
USD 7,871,850
Project

Mobile Money for the Poor (MM4P)
Goal To demonstrate how the correct mix of technical, financial, and policy support can assist in scaling up sustainable branchless and mobile financial services that reach the poor in very low-income countries.
How
  • Providing financial and technical support to service providers and financial service agents;
  • Supporting market and client research to develop products and services that reach low-income and rural households;
  • Bringing large scale users into the branchless and mobile financial services system;
  • Assisting central banks to create enabling environment for branchless and mobile financial services;
Period 2011-2017
Partners UNCDF, Sida, AusAID
Total project cost and UNCDF contribution 27,000,000
1,000,000
Project

LoCAL
Goal To support climate resilience at the local level.
How
  • Channeling global adaptation finance to local governments for investment in climate change adaptation.
Period 2011-2013
Partners UNCDF, UNDP, UNEP, CCCA Trust Fund, Adaptation Fund
Total project cost and UNCDF contribution USD 1,500,000
USD 700,000