The Legal and Regulatory Framework for Microfinance Sector in Lao PDR
The current regulatory framework for microfinance is basically comprised by a Prime Minister’s Decree on Microfinance Institutions (Decree No. 460/G) dated 3 October 2012 as well as three regulations for Deposit Taking MFIs (DTMFI), Non-Deposit taking MFIs (NDTMFI) and Savings and Credit Unions (SCUs).However, these regulations date from 2008 and are based on an earlier decree; they will eventually be replaced by “Implementation Guidelines” that will cover DTMFIs, NDTMFIs and so-called Microfinance Projects, while SCUs are still being regulated by the old SCU Regulation from 2008 (No. 03/BOL).
The new Prime Ministerial Decree explicitly allows foreign investment in DTMFIs but does not specify the proportion of total capital foreign equity may represent. This will be defined in the implementation guidelines.