NDTMIs still face challenges despite progress
NDTMIs still face challenges despite progress
Non-Deposit Taking Microfinance Institutions (NDTMIs) still face various challenges in their operations and organisational development to meet international standards despite continued growth in the sector.
The government, and especially the Bank of the Lao PDR is prioritising the promotion of better access to lower interest finance through competition between banks and microfinance institutions, according to the annual meeting of NDTMIs in Vientiane yesterday.
While financial services on offer have increased human resource capacity and financial management skills are still limited, particularly for credit assessments and approvals, and the monitoring of loan customers.
NDTMIs' risk administration mechanisms and systems have not been perfected yet and lack the tools for inspections while employees were not following guidelines strictly.
However, the Asean Economic Community (AEC) offers opportunities in cooperation and integration regarding capacities in human resource, marketing and administration.
�Last year, NDTMIs assisted in creating job opportunities for local people. Their assets increased from 107.33 billion kip in 2015 to 126.98 billion kip last year or by about 18.25 percent,� Financial Institution Supervision Department's Director General Dr Akhom Praseuth reported at the meeting.
�Credit offered by NDTMIs rose from 83.65 billion kip in 2015 to 86.88 billion kip last year or 3.85 percent and net profit increased from 8.83 billion kip to 10.91 billion kip or 23.51 percent,� he said.
The numbers of NDTMIs also increased from 43 to 59 institutions, with total funds increasing from 46.63 billion kip to 63.33 billion kip or 35.81 percent.
Most loans were released in three main sectors; 12.20 percent for households, 47.16 percent for trading and services with 40.65 percent for agriculture.
At the meeting, the Deputy Governor of the Bank of Lao PDR, Mr Sonesay Sithpaxay stressed that NDTMIs should not provide services just to make a profit but rather develop sustainable relationships with their customers.
Senior officials from different departments of the Bank of the Lao PDR, relevant ministries along with representatives from state commercial banks, NDTMIs and international organisations also attended the meeting.
