Is it Lao or Laos?

Formerly known as “Laos” during French occupation from the late 19th to the mid-20th century, it gained independence in 1953 and the Lao People’s Democratic Republic (“Lao PDR”) was eventually formed on 2 December 1975, when Laos officially changed its name to the Lao PDR.

However, much confusion remains globally about the correct spelling, often connected to geographical location or English dialect applied. Whilst the French spelling “Laos” is still widely used, the “s” is silent, so it is pronounced the same as “Lao” (i.e., not as “Lowse”, “Lay-os”, etc.).

We hope to raise awareness of the Lao PDR in general and help highlight it on the map to ethical investors.


What is microfinance?

Microfinance is a category of financial services targeting individuals and small businesses who lack access to conventional banking and related services.

Microfinance includes microcredit, the provision of small loans to poor clients; savings and checking accounts; microinsurance; and payment systems, among other services.

Microfinance services are designed to reach excluded customers, usually poorer population segments, possibly socially marginalised, or geographically more isolated, and to help them become self-sufficient.

Want to know more about microfinance? You might also be searching:

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  • What is green finance
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For a broader, global perspective, the World Bank’s “World Development Report 2022” contains a focus on inclusive and sustainable finance, with a particular spotlight on financial inclusion and financial resilience, and lending during pandemic recovery with support for microfinance to sustain small businesses.

What is an MFI?

An “MFI”, or microfinance institution, could most simply be described as a financial institution that provides small loans to people who otherwise wouldn’t have access to credit (source).

ADA states that like a bank, a microfinance institution is a provider of credit. However, the size of the loans are smaller than those granted by traditional banks. These small loans are known as microcredit. The clients of an MFI are often microentrepreneurs in need of economic support to launch their business. This type of client is considered too risky by traditional banks because they cannot provide real collateral and because they tend to work in the informal sector of the economy.

Lack of finance is a major constraint to the establishment of small-scale businesses and other income generating activities in impoverished communities in several developing countries. Through microfinance institutions, this constraint can be removed, and the much-needed credit provided to small businesses that are often unable to access credit from formal financial institutions. In this way, micro-credit can be instrumental in stimulating economic activity, creating jobs in the informal sector, increasing household incomes, and reducing poverty. (Source)

Microfinance allows people to take on reasonable small business loans safely, and in a manner that is consistent with ethical lending practices. (Source)

Other common search queries on this topic include:

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What does social impact mean?

Social Impact is a significant, positive change that addresses a pressing social challenge. (Source)

Good Finance states that social impact can be defined as the effect on people and communities that happens as a result of an action or inaction, an activity, project, programme or policy.

In essence, the definition of social impact means any significant or positive changes that solve or at least address social injustice and challenges. Businesses or organisations achieve these goals through conscious and deliberate efforts or activities in their operations and administrations. (Source)

Impact analytics platform, Upmetrics, offers this helpful blog. And Gapminder offers fantastic tools and insights into the world around us here

What is PAR>30 rate?

You may be wondering, what does PAR >30 mean?

PAR >30 in microfinance is an essential tool used by financial institutions to measure their “Portfolio At Risk”, or the value of loan payments outstanding for more than 30 days.

Since the loan portfolio is the foremost asset of a microfinance institution, it constitutes its main source of risk. In general, loans granted by MFIs are not backed by collateral. As a result, the loan portfolio quality is very central to MFIs. (Source)


EMI is proud to maintain an extremely low PAR >30 rate of under 1% in 2021, where the market benchmark is 5%.

Does microfinance reduce poverty?

People often search terms like “does microfinance work?” Or “does microfinance help the poor?” Or maybe even “do borrowers benefit from microfinance?”

Well, yes – of course!

ADB states that giving the poor access to affordable financial services enables them to seize livelihood opportunities, manage cash flow spikes, and mitigate risks.

In the book “Poverty Reduction Strategies in Developing Countries”, the author states that a number of countries in Asia have developed and implemented programs that have been impactful in significantly reducing extreme poverty. Economic growth is vital in enabling impoverished communities to utilise their resources to increase both their output and incomes and thus break the poverty trap and be able to provide for their basic needs.

The International Labour Organisation published this paper on how microfinance can help reduce the need for young people to migrate for employment and thus diminish their vulnerability to human traffickers.

Microfinance loan examples

Want to know more about how micro loans work? Click here to read some of our Customer Success Stories.


How can I learn more about financial inclusion?

Some other helpful resources on microfinance and financial inclusion include: