Providing the rural poor with better access to financial services

Project description

Title: Microfinance in Rural Areas V - Access to Finance for the Poor (AFP V)
Commissioned by: German Federal Ministry for Economic Cooperation and Development (BMZ)
Cofinanced by: The Australia Federal Department of Foreign Affairs and Trade (DFAT)
Country: Laos
Lead executing agency: Bank of Lao PDR (BoL)
Overall term: 2019 to 2022

Financial & business literacy training, Champasak Province Photo: GIZ/Maxly Inthaxai


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.


People in rural areas are benefiting increasingly from financial services thanks to more stable institutions, better financial education and an improved legal framework.

Financial & business literacy training, Savannakhet Province. Photo: GIZ/Maxly Inthaxai


The project provides intense capacity development to employees of the Network Support Organizations (NSOs) so that they can provide high-quality technical and financial services to community-managed village banks.

Moreover, Boards of Directors, as representatives of village banks, are trained to effectively audit and control the management of the NSOs to ensure that they are working in line with the law and in the interest of the village banks. At national level, the project supports the Bank of the Lao PDR in comprehensively embedding the village-bank approach into the legal framework of the country.

Last update: September 2021

Additional information