Germany, Australia fund rural microfinance project
Germany, Australia fund rural microfinance project
The German Federal Ministry for Economic Cooperation and Development and the government of Australia have provided more than 6.3 million euros (over 60 billion kip) to boost community-based village banks and build the financial capacities of rural populations.
The funds will support a project running from December 2014 until December 2017, which is being implemented by the Bank of the Lao PDR (BOL) and the German Development Cooperation (GIZ).
The extension of the three-year “Microfinance in Rural Areas – Access to Finance for the Poor” (AFP III) project was jointly declared by the ambassadors of Germany and Australia during the Non-Deposit Taking Microfinance Institutions Forum 2014 in Vientiane yesterday.
The forum also allowed BOL officials to highlight past achievements in the management of previous projects.
BOL and the fund providers also outlined future plans for project implementation over the next three years.
The objective of the project is to grow the share of the rural population making better use of sustainable financial services. The rationale is to enable these populations to better finance investments, save for necessities and manage risks.
Due to its many years of experience in supporting BOL in formulating a Prime Ministerial Decree on Microfinance Institutions and setting up market surveillance software for the Financial Institution Supervision Department, the AFP III will hopefully further assist financial access for the local population.
The agreements for the third phase of the Lao-German Cooperation project were signed by representatives from the relevant parties including Germany, Australia, BOL and the Ministry of Planning and Investment.
According to the board of management for the AFP project, it supports 433 village banks, which manage almost 39,000 active accounts with most of them in remote areas.
It indicates that the majority of these are family accounts, and women hold 55 percent of the individual accounts.
The AFP III project follows on from the successful implementation of earlier programme components that have been carried out since 2009.
The value of accumulated savings already exceeds 31 billion kip (3.1 million euros) and over 10,000 loans have been granted with a total value of 30 billion kip (3 million euros).
In his speech at the forum, German Ambassador to Laos Mr Michael Grau spoke about the German Savings Bank Sector, which had started more than 150 years as a small financial institution but still holds a significant market share in Germany's financial market today.
The Australian Ambassador to Laos, Mr John Williams, also praised BOL for its effective implementation of the project over the past years.
“We are delighted to be working closely with our friends from Germany and UNCDF, and the Bank of the Lao PDR to deliver these programmes to rural people in Laos,” he said.
Of the newly funded amount of over 6.3 million euros, the German Federal Ministry for Economic Cooperation and Development has contributed over 3.5 million euros while more than 2.6 million euros comes from the government of Australia.
In addition, the Australian mining company in Laos, MMG Lane Xang Minerals Limited, is also providing 200,000 euros.
