Microfinance & Sustainable Livelihood (Feasibility Study Mission Report)

This paper discusses the report presented by the feasibility study mission about the feasibility of microfinance in Lao. The report comprises two parts - the first part discusses the mission objectives and scope as derived from consultations with key stakeholders, field visits and workshops, while the second part details the feasibility study to create a sustainable national microfinance institution (MFI) in Laos.

The first part of the paper discusses:

• The main objective of the feasibility study to assess the potential sustainability of microfinance in Laos;
• Major observations of the feasibility mission derived from interaction with the stakeholders;
• The report's recommendation on consolidating operations, setting up a coherent governance structure and establishing a national MFI that would work towards managerial, financial and technical sustainability.

The second part of the paper details the consolidation and institutionalization of the project into a national MFI. It discusses:

• The rationale and objectives of the microfinance project in Laos - the main objective was poverty reduction by creating opportunities for income generation;
• The project activities and project management;
• The key principles for the success of a national MFI, including broad-based stakeholder ownership, veto power of donors, transparency and the implementation of best principles.

Finally, the paper provides details on the financial sustainability, implementation arrangements, financial requirements and risks of the project. It concludes that a national MFI can be set up in the Lao context.