The development of cooperatives and a cooperative system in Laos is still at its infancy. So far, only individual cooperatives are registered in the agricultural and microfinance sector, whilst second tier support organisations are not yet fully developed. Such networks and federations, however, play an important role in the transfer of knowledge, as they can provide targeted and needs-oriented advice to their members. Therefore, the support of networking activities and the strengthening of association structures to develop their own advisory and support capacities play a crucial role in the development of the cooperative system in Laos.
Some years ago, DGRV Laos, together with its partner Bank of Laos (BoL), started to organize workshops for all registered Savings and Credit Unions (SCU) of Laos. These workshops served as an important and path breaking exchange opportunity among the SCUs, with information input from both BoL and DGRV Laos. Subsequently, the Asian Confederation of Credit Unions (ACCU) joined as a new partner and supported the project in its efforts to organize study tours, trainings and internships at SCU federations in Thailand.
Step by step, this increased exchange among SCUs became institutionalized as an SCU network until, finally, the discussion arose on the network’s further development into an officially registered cooperative federation. BoL, as the national supervisor for all banking and microfinance institutions in Laos, understood that the formation of an SCU federation is highly significant as it contributes to the strengthening of the individual SCU and thus increases member protection. BoL agreed that this federation may provide capacity building for its members and also assist them in the introduction of a risk management system. The project organized meetings with the Ministry of Home Affairs, which is responsible for the registration of associations, and with the support of all relevant partners, the network could be officially registered in January 2020 as the first fully-fledged cooperative federation in Laos, the LAO ASSOCIATION OF SAVING AND CREDIT UNIONS (LASCU).
ACCU and DGRV continued to provide comprehensive capacity building for LASCU, including consultancy for formulating its internal regulations. Since last year, LASCU has generated its first income from membership fees. In view of increasing capacities to provide consultancy and capacity building to its members, the federation has decided that in future members would also contribute service fees to benefit from trainings organised by LASCU. The income will not yet cover all expenses, but it contributes to paving the road towards the federation’s autonomy and sustainability. ACCU and DGRV will continue to provide trainings and some financial contributions to further strengthen the new federation. Furthermore, LASCU will soon become a member of ACCU and thus part of the international cooperative family.
The successful setup of Laos’ first cooperative federation was only possible through the project’s close and trustful cooperation with ACCU and Bol and thus demonstrates once more what can be achieved when organizations work together.
It is expected that LASCU may well serve as a model for a potential future federation of agricultural cooperatives in Laos.
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