UNCDF has been present in Lao PDR since 1982, providing assistance to meet its development challenges through joint programming with UNDP on local development and financial inclusion.
Today, UNCDF offers “last mile” finance models that unlock public and private resources, especially at the domestic level, to reduce poverty and support local economic development.
Through Financial Inclusion Practice, UNCDF, jointly with Bank of Lao PDR and the Central Bank is implementing Making Access to Finance More Inclusive for Poor People (MAFIPP) programme improving policy and regulatory environment while strengthening the financial infrastructure and capacity of financial service providers at the macro, meso and micro levels.
Lao PDR has also introduced the Mobile Money for the Poor (MM4P) programme, reaching millions of new unbanked customers. UNCDF established the Making Access Possible (MAP) evidence-based Financial Inclusion policy framework, which is working to diagnose financial inclusion disaggregated by gender, geographic location, income level and other demographics.
Additionally, UNCDF is implementing Shaping Inclusive Finance Transformations (SHIFT) programme to accelerate financial inclusion and women’s economic participation in the ASEAN region.
Through the Local Development Finance Practice, UNCDF has been providing technical assistance in designing, upgrading and implementing the District Development Fund (DDF) as discretionary, incentive-driven and performance-based block grants for capital investment projects and other public service delivery interventions. As a government mechanism, the DDF has been channelled through the inter-governmental fiscal transfer system, directly to the district administrations to move forward with decentralization process and to finance and strengthen public financial and expenditure management capacities at the local level. Under the National Governance and Public Administration Reform (GPAR) programme, the DDF facility forms a key component of the Strengthening Capacity and Service Delivery of Local Administrations (GPAR SCSD) 2012-2016.
The UNCDF global programme on the Local Climate Adaptive Living Facility (LoCAL) to help governments to access to and channel global climate change financing to the local level has been also implemented in Laos. The revised DDF mechanism incorporating climate resilience in small scale rural infrastructure development has been adopted by the Ministry of Natural Resources and Environment (MoNRE) together with the MoHA and implemented under the UNDP and Global Environment Facility (GEF) supported project on the Small Scale Rural Infrastructure and Disaster Preparedness in a Changing Climate 2013-2017. The Local Finance Initiative (LFI), aimed at bridging the significant gap between local economic infrastructure needs and available funds is also being introduced.