Paper

Rural Finance in Laos: GIZ Experience in Remote Rural Areas

Insights from GIZ experiences with financial inclusion in remote rural areas of Laos
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This report presents insights from nearly ten years of GIZ's experience in supporting the provision of rural microfinance in remote areas of Laos. It describes GIZ's approach to working with Village Banks and Village Bank Network Support Organizations. It analyzes household data of GIZ Village Bank clients collected in 2011. The report also examines data on the financial inclusion of women.The savings analysis reveals large financial assets that are not invested in flexible and income bearing asset accounts. The credit analysis recognizes further demand for investment in rural Laos. It also recognizes the success of the Village Banking model. The report states that rural microfinance operations have led to increased financial literacy and social progression. They have improved the conditions for women and ethnic minorities in rural Laos. Going forward, GIZ proposes to:
  • Offer a new interest bearing savings product in 2013;
  • Strengthen credit approval processes;
  • Reduce portfolio at risk ratios;
  • Improving the repayment quality of current loans;
  • Train microfinance field advisors on addressing non-performing loans;
  • Continue its partnership with the Bank of Lao to increase transparency for other microfinance endeavors.

About this Publication

By Prochaska, K., Hauger, P. & Fischer, D.
Published