Developing a Rural Microfinance Institution in Laos (2009-2014)

microfinance2Only about 15% of households in Laos have access to formal financial sources. Poor rural communities in Laos do not have access to secure and reliable financial services. Consequently, families are unable to make significant investments in developing their livelihoods, weather economic shocks, and save for the future. World Education Inc. and World Education Australia (WEAL) established an autonomous, locally owned and managed microfinance agency in Saravan Province in southern Laos.

As a result of these efforts, Vanmai (which means “New Day” in Laos) Savings and Credit Union (SCU) was formally established in November 2010. The premise behind it was to create an institution that met the financial needs of local people, offering a safe place to save and access loans. Its mission is “to meet the needs of members by providing transparent, sustainable, effective, and fair service to the members so they can improve their living conditions.”

Vanmai has a Board of Directors that meets monthly, a Credit Committee that meets to discuss and approve loans once a week, and an Audit Committee that conducts monthly internal audits. Full-time staff includes a manager, two credit officers, an accountant, and a cashier. World Education trained the Vanmai staff and boards to improve both their technical knowledge and skills and their leadership and management skills. Some training topics included “Credit and Delinquency Management,” “Marketing and Product Development,” “Leadership Skills,” and “Service with a Heart.” The Vanmai staff also visited established SCUs throughout southern Laos to observe best practices and receive helpful advice.

The project also provided trainings for Vanmai members. As most members were farmers or small business owners, training topics included “Animal Raising and Agriculture” and “Starting a Small Business.” Staff, boards, and members all received a “Gender Equity and Awareness” training.

In 2010-2011, Vanmai was officially recognized by law in Saravan Province. Vanmai SCU is a regulated financial institution by the Bank of Laos, the country’s central bank, and is required to provide monthly performance reports. As of 2014, Vanmai SCU has provided loans to over 800 people in Saravan Province in southern Laos.

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