Function of Savings and Credit Unions in Laos: From a Village-SCU Survey in

Savings and Credit Unions (SCUs), a type of self-help group, have been rapidly forming in Laotian villages since the early 2000s. This paper investigates their characteristics, activities, and exogenous determinants of their activity based on an original questionnaire survey. It presents a descriptive analysis of endogenous factors such as member ratios and deposit and loan amounts and exogenous factors such as SCUs ’ age, location, and village characteristics with descriptive analyses. The results revealed that SCUs ’ membership is formed early in their operating history and remains generally unchanged. Loans for production purposes are a larger percentage of SCUs ’ lending during their early years, shifting to consumption loans in later years. SCUs ’ performance features differ after five years in operation and in villages that have diversified away from agriculture. Economic diversification and SCUs ’ sustainability are related to immigrants settling in villages since the Laotian civil war. We conclude that SCUs serve obvious social and economic purposes and that prospects for their sustainability are greater in villages with diversified economies