Microfinance seen as key to poverty reduction
  • January 11, 2012

Microfinance institutions have been strengthened and now play a key role in the economic development of Laos by giving poor people access to finance.

The Microfinance Stakeholder Forum 2011 was opened yesterday by Deputy Governor of the Bank of the Lao PDR, Mr. Bounsong Sommalavong, at the International Cooperation and Training Centre in Vientiane. Participants included representatives from international funding projects and microfinance in Laos.

Mr. Bounsong said microfinance provision had improved continually since 2008 when the Bank of the Lao PDR issued regulations on the management of microfinance institutions.

‘Up until this year, we can see that microfinance has improved a lot, especially legal issues, management and skills in technical fields’, he said.

During the meeting, the microfinance working team reported on the operation of microfinance in Laos, including the challenges and potentials, lessons learned and plans for the future.

In this meeting, we can exchange views and discuss matters to ensure the sustainable growth of microfinance on Laos and increase access to microfinance’, Mr. Bounsong said. ‘Microfinance provides a key contribution to the economic development of Laos by providing greater access to funds for more poor people.’

Acting Director of the Finance Institution Supervision Department, Mr. Akhom Praseuth, commented on developments in the sector over the past year.

He reported that there are currently 44 microfinance institutions in Laos, 16 of which are in Vientiane. There are also five credit finance services, 25 mortgage lenders and five international money transfer companies who between them have 76 branches nationwide – an increase from last year. Microfinance saving schemes accumulated 148 billion kip in the last nine months - a 27 percent increase from 2012.

Related international agencies including the United Nations capital Development Fund (UNCDF) and Gesellschaft fuer Internationale Zusammenarbeit (GIZ) gave presentations on their work in this field over the last 12 months and discussed plans for next year. Several microfinance institutions also gave presentations of their work, featuring the challenges they face and their plans for the future.

The meeting was organized by the Bank of the Lao PDR and co-supported by the UNCDF and GIZ.