MICROFINANCE IN THE LAO PDR, 2009 EDITORIAL BOARD Mr. Souphith DARACHANTHARA Deputy Director General, National Economic Research Institute Survey Team Leader ‐ Analyst, Editor Mr. Phokhong THEPKAYSONE Director, Development Research Division Survey Team Leader Assistant ‐ Analyst Mr. Thanongsai SOUKKHAMTHAT Deputy Director, Development Research Division Project Coordinator ‐ Analyst Ms. Phoutthasone SINTHAVONG Ms. Dorkfa SIYOTHA Ms. Viengsavanh SOULIYA Mr. Bounmy SOUTPILA Survey and Research Team Members Prof. (em.) Dr. Hans Dieter Seibel Mr. Klaus Prochaska GIZ Project Director Editors CONTENTS Page FOREWORD………………………………………………………………………………………………………i ACKNOWLEDGEMENTS ....................................................................................... iii Chapter 1: Microfinance in the Lao PDR ............................................................. 1 1.1. Background and History of Microfinance in the Lao PDR ............................................................ 1 1.2. From Microcredit to Microfinance: the Terminology of an Emerging Sector .............................. 2 1.3. The Emergence of Village Fund Networks ................................................................................... 3 1.4. The Microfinance Working Group for Lao P.D.R……………………………………………………………………….4 1.5. The Regulatory Framework of Microfinance ............................................................................... 4 Chapter 2: Governmental and International Support Programs .................... 6 2.1. Government Programs and Projects…………………………………………………………………………………………6 2.2. International Programs and Projects ........................................................................................... 7 2.2.1. Multilateral and bilateral agencies ........................................................................................ 8 2.2.2. Non‐governmental agencies ............................................................................................... 11 Chapter 3: Microfinance Statistics at the National Level .............................14 3.1. Background, Objectives and Methodology ................................................................................ 14 3.2. The Regulated Microfinance Sector ........................................................................................... 15 3.2.1. Number of MFIs by Region .................................................................................................. 15 3.2.2. Villages Covered and Members/Clients Access .................................................................. 16 3.2.3. Employment Creation ........................................................................................................ 16 3.2.4. Loan Information ................................................................................................................. 17 3.2.5. Loan Use .............................................................................................................................. 19 3.2.6. Savings Information............................................................................................................. 19 3.2.7. Income Statement ............................................................................................................... 21 3.2.8. Balance Sheet ...................................................................................................................... 22 3.3. The Unregulated Microfinance Sector: Village Funds ................................................................ 24 3.3.1. Outreach of VFs by region and type of VF (with and without savings) ............................... 24 3.3.2. Loan Information ................................................................................................................. 25 3.3.3. Savings Information............................................................................................................. 27 3.3.4. Income Statement .............................................................................................................. 27 3.3.5. VF’s Balance Sheet .............................................................................................................. 28 3.3.6. Return on Assets ‐ Comparing regulated MFIs and unregulated VFs ................................. 30 3.4. Summary and conclusions .......................................................................................................... 31 Chapter 4: Microfinance Statistics at the Provincial Level ...........................34 1. Phongsaly Province ....................................................................................................................... 34 2. Luangnamtha Province .................................................................................................................. 37 3. Bokeo Province .............................................................................................................................. 40 4. Oudomxay Province ...................................................................................................................... 43 5. Luangprabang Province ................................................................................................................. 46 6. Huaphan Province ......................................................................................................................... 49 7. Xayabuly Province ......................................................................................................................... 52 8. Vientiane Capital ........................................................................................................................... 55 9. Xiengkhuang Province ................................................................................................................... 58 10. Vientiane Province ...................................................................................................................... 61 11. Bolikhamxay Province ................................................................................................................. 64 12. Khammuane Province ................................................................................................................. 67 13. Savannakhet Province ................................................................................................................. 70 14. Saravanh Province ....................................................................................................................... 73 15. Sekong Province .......................................................................................................................... 76 16. Champasak Province ................................................................................................................... 79 17. Attapeu Province ......................................................................................................................... 82 References .........................................................................................................85 Annexes .............................................................................................................86 Annex 1: List of 5 DTMFIs and 8 NDTMFIs ........................................................................................ 86 Annex 2: List of 13 Saving and Credit Unions (SCUs) ........................................................................ 87 Annex 3: List of 192 village fund promoters and village funds ......................................................... 88 Annex 4: Questionnaire ..................................................................................................................... 94 List of Tables Page Table 1: Number of Providers by Region ..........................................................................................16 Table 2: Microfinance outreach ........................................................................................................16 Table 3: Employment ........................................................................................................................17 Table 4: Loan information .................................................................................................................17 Table 5: Number of borrowers by region ..........................................................................................18 Table 6: Loan outstanding by region .................................................................................................18 Table 7: Interest rate of loan provision per month ...........................................................................19 Table 9: Savings information ............................................................................................................20 Table 10: Number of savers by region ..............................................................................................20 Table 11: Amount of savings by region .............................................................................................21 Table 12.1: Income statement ..........................................................................................................21 Table 12.2: Average Income statement per type of MFI ..................................................................22 Table 13.1: Balance Sheet .................................................................................................................23 Table 13.2: Average Balance Sheet