Stakeholders review project to provide finance for rural poor
Stakeholders review project to provide finance for rural poor
The Access to Finance for the Poor project (AFP) invited its stakeholders from Laos, Germany and Australia to its annual meeting in Vientiane on January 26.
The objective of the meeting was to review progress, discuss challenges and establish a work plan for 2017. The meeting was chaired by the Deputy Governor of the Bank of the Lao PDR, Mr Sonexay Sithphaxay.
The project donors were represented by Deputy Head of Mission of the Australian Embassy, Mr Andreas Zurbrugg, GIZ Country Director Laos, Mr Ernst Hustaedt, and Ms Niddavone Douangphonexay from MMG LXML Sepon.
The focus of the AFP project is to advance financial inclusion in Laos. The project implements a multi-level approach which concentrates on advancing financial inclusion, enhancing financial literacy and improving the framework for client protection in financial services, according to the GIZ Laos Office.
The AFP project was established with support from the German government in 2009 and has received additional financial support from the government of Australia since 2013. It is jointly implemented by the Bank of the Lao PDR (the Lao central bank) and Deutsche Gesellschaft fuer Internationale Zusammenarbeit (GIZ) GmbH.
In 2016, the AFP project supported by the Bank of the Lao PDR established and disseminated guidelines for microfinance regulations, organised microfinance sector stakeholder meetings, progressed financial sector consumer protection, and developed a draft national financial literacy strategy.
A strong focus of the project is on ensuring the sustainability of community-managed financial institutions, so-called village banks, and microfinance institutions which operate on the provincial level to provide technical and financial support to village banks.
Speaking at the meeting Mr Zurbrugg said The Australian government is very proud to support this project, which provides access to finance to poor, remote communities that are unable to access investment funds.
We know that access to finance is an important enabler of private sector development, and we have already seen the project support the development of hundreds of small private businesses in rural communities which would otherwise not have been possible.
Mr Zurbrugg emphasised that an important part of the project was its focus on women's empowerment and gender equality. The majority of micro-, small and medium enterprises in Laos are run by women, but they often face greater challenges in accessing finance than men. In the AFP project, women account for more than 34 percent of village bank committee board members and around 55 percent of single account owners are women.
Mr Hustaedt commented on the high acceptance of the AFP model among rural populations.
Today, the project supports almost 100,000 members spread over 541 village banks in 22 poor districts in the provinces of Attapeu, Champassak, Luang Namtha, Saravan, Xayaboury, and Savannakhet.
Many of the village banks have made great progress towards sustainability, with more than 85 percent having achieved a profit in 2016, and a very low credit portfolio risk of 3.6 percent. The village banks are actively used by their local communities.
More than two-thirds of account holders use their village bank at least once a month, and the savings volume has almost doubled in each of the last two years and now exceeds 112.5 billion kip.
