PROBLEM / SOLUTION

THE PROBLEM

Limited access to formal financial services for the rural poor is one of the biggest challenges within the Lao economy.

Commercial bank branches are concentrated in urban areas and well below the ASEAN average, at only 3.2 branches per 100,000 adults in 2020. According to ADB statistics, less than a third of the adult population held a bank (or other financial institution) account in 2017. In 2015, there were only 23 ATMs for every 100,000 adults, also well below the ASEAN average of 52 at the time. (Source)

Residents living in remote areas of Lao PDR have no access to finance, making it impossible for budding social entrepreneurs to advance their business dreams. These people live in places that are hard to reach, with limited access to modern technology, and the major banks simply don’t operate in such remote areas.

There is also a strong unmet need for sustainable financial services throughout Lao PDR with such a fast-growing economy, but there is a low level of financial literacy; many people’s perceived financial needs are modest and not future-proofed.

The Solution

Much of Lao lacks adequate infrastructure and a vast proportion of the population live in remote regions, so we are developing the financial technology to address this challenge of tackling rural poverty.

Ethical microfinance is considered the best means to move the country towards a more market-oriented economy and to encourage the transformation from subsistence farming to market-oriented farming. Many are vulnerable to falling back into poverty, with potential for agriculture or health shocks and inadequate safety nets.

We are an original and integral part of the financial sector in Lao PDR, leading the Lao microfinance market by offering rural financial services that encourage sustainable development in Lao.

We offer tailored microfinance solutions to rural families in areas currently not served by any other banking institution or MFI in Lao PDR.

Since 2006, we have helped improve the quality of life for over 120,000 families in Lao PDR by providing responsible microfinance to vulnerable populations in remote areas.

Offering remote access to credit for the informal economy and encouraging financial literacy, we are reducing social vulnerability and creating the ability to realise value from collateral with rural financial services in some of the poorest regions of Lao.

“Financial resilience is an important aspect of financial inclusion—that is, when one has access to the appropriate financial tools (such as bank accounts, savings, credit, and digital payments) that can be used safely in a well-regulated environment to meet one’s needs. Financial resilience refers to the ability of people and firms to recover from adverse economic shocks, such as job loss or unanticipated expenses, without suffering a decline in living standards.”

(Source: World Bank – World Development Report 2022, Spotlight 1.1)