Enhancing Financial Sector Supervision - Component 2

Date: July 2012
Document Type: Consultant's Reports
Project Number: 42224-012

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This report is produced by consultant for component 2 of TA 7500–Lao PDR: Enhancing Financial Sector Supervision. It is one of the three components of the technical assistance and deals with financial sector issues related to rural and microfinance services; the other components deal with the banking sector (Component 1) and money laundering (Component 3).

This component will (i) develop a standardized industry monitoring and reporting system, including off-site and on-site inspection manuals and procedures, and corrective mechanisms for microfinance institutions (MFIs), financial cooperatives, and village banks; (ii) upgrade the microfinance regulations to a decree with possible inclusion of regulations for the establishment and operation of apex institutions, and facilitate training on compliance; (iii) provide capacity training for the Bank of Lao's microfinance supervisors, including on-the-job training and exposure/study visits to different supervisory models in neighboring countries (Cambodia, the Philippines, and Viet Nam); (iv) support a study on upgrading the MFI supervisory unit to a department, as necessary; and (v) support a feasibility study for the establishment of a nationwide apex institution to provide financial and technical support to MFIs.