Microfinance for the Poor in Lao PDR - National Conference Report

Microfinance in Lao PDR is largely underdeveloped, with only 21 percent of the one million microfinance clients having access to formal microcredit. The key reasons for this are:

• Lack of cohesion;
• Centralized government system;
• Low population density;
• Poor infrastructure.

This paper compiles the discussions during the national conference on microfinance for the poor in Lao PDR, aimed at stimulating dialogues between practitioners, policy makers, donors and INGOs. The topics covered during the conference included:

• Regulation;
• Study results of two key studies in Lao PDR;
• The role of the Agricultural Promotion Bank in microfinance;
• Case studies by 13 microfinance programs.

The paper discusses conference as follows:

• The presentations made, describing the key points in each, and enlisting the main conclusions and comments during the presentations sessions;
• The participants' group work exercise, representing donors and practitioners, and seeking to ensure microfinance growth and promotion in Lao PDR.

The key recommendations made by the participants were:

• The Government should give priority to pro-poor microfinance and allow foreign investment in the sector;
• The practitioners must abide by the Lao PDR microfinance regulations;
• The practitioners should have a diverse base of funders;
• The INGOs should continue microfinance capacity building work in Lao PDR.