Context
The Lao People’s Democratic Republic (PDR) is categorised by the United Nations as one of the world’s least developed countries. More than two-thirds of its seven million citizens live in rural areas and have only limited access to basic financial services, education and markets.
Despite the country’s progress in providing pro-poor financial services, only a few commercial banks and microfinance institutions operate outside of the urban centres. Access to formal financial services for the rural poor is therefore severely limited, and this remains a major challenge for both the Lao economy and individual households. People living in rural areas generally have limited financial re-sources and often lack the necessary reserves to cope with emergencies.
Furthermore, expanding businesses by taking out loans or depositing money safely are services that are often not available to people in rural areas when there are no banks with their reach. Combined with this, many of the rural poor do not have experience and lack skills in managing their financial affairs.
Objective
People in rural areas are benefiting increasingly from financial services thanks to more stable institutions, better financial education and an improved legal framework.
