Microfinance services in rural areas

completed

The aim of the project is to support the formal banking sector in Laos in providing poor households and micro, small and medium-sized enterprises (MSMEs) in rural areas with sustainable and needs-based financial services. The project is embedded in the development cooperation program of the same name and contributes to the structural improvement of the framework conditions in the financial sector, access to adequate financial services and the performance of financial institutions. The FC grant of EUR 3 million will be used to set up a revolving microfinance fund at the Laotian central bank, the so-called Lao Access to Finance Fund. Initially, the full amount of the fund will be provided as a loan to ACLEDA Bank Lao Ltd., which will use it to grant microcredits in rural areas. The central bank and other selected partner banks will receive support in building capacity from a training and further education measure amounting to up to EUR 800,000. The personnel and administrative costs will be borne by the Laotian central bank as a contribution. In subsequent phases, all selected banks will be able to access the fund's revolving resources to refinance their microfinance business, provided they meet the agreed quality criteria.