Microfinance services in rural areas - "Lao Access to Finance Fund II" (LAFF II)

active

The aim of the module is to support the formal financial sector in Laos in providing small, medium and small enterprises (MSMEs) and economically active households in rural areas with sustainable and needs-based financial services (module objective). The project is embedded in the development cooperation program of the same name and contributes to improving the productivity and competitiveness of the private sector in order to create jobs and reduce poverty (program objective). The recipient of the grant of EUR 6 million is the Lao People's Democratic Republic, represented by the Ministry of Finance. The Ministry of Finance passes the grant on in full to the project sponsor, the Laotian central bank Bank of the Lao PDR (BoL). The Central Bank of Laos already manages a revolving loan fund for MSME lending called the Lao Access to Finance Fund (LAFF), which was set up in a previous phase. The funds are paid into this fund and used as long-term loans to partner financial institutions (PFIs). The partner financial institutions use the funds to grant loans to MSMEs according to predefined eligibility criteria. An accompanying measure will be implemented to support the Lao Central Bank and partner financial institutions.