A legacy of resilience: The rise of Saving and Credit Union Soumsonphatana

This article marks the 70th anniversary of the establishment of the Lao People’s Revolutionary Party, the 50th anniversary of the founding of the Lao PDR, and the 105th anniversary of the birth of former President Kaysone Phomvihane this year.

What began as a humble village effort in Borikhamxay province in 2019 to break free from the clutches of high-interest informal lending has now become a beacon of rural financial inclusion in Laos.

The Saving and Credit Union’s Honorary Chairperson, Mr Thongbay Thongsay.

On April 4, more than 180 leaders, donors and villagers gathered for the Annual General Meeting of the Saving and Credit Union Soumsonphatana (SCU Soumsonphatana) to celebrate not just a record profit of 119 million kip in 2024, but also a transformative five-year journey.
SCU Soumsonphatana was formally established in 2020, rooted in the mission of providing accessible financial services to rural communities, particularly farmers, women and small-scale entrepreneurs.
At a time when many people in rural areas had no access to formal banking, the Saving and Credit Union emerged as a critical alternative, thanks to a collaborative effort by local leaders and international partners such as ADA-LuxDev of Luxembourg and the Lao Women’s Union.
One of the founding members of the Saving and Credit Union, Mrs Bounlod from Nampa village in Borikhan district, Borikhamxay province, said “We wanted to stop people from hiding money under mattresses or turning to predatory lenders.”
The journey was far from smooth. In its initial years, SCU Soumsonphatana faced significant obstacles, including limited trust, capacity gaps and sustainability concerns.
Yet, the SCU pushed forward. Through financial literacy campaigns, support from local authorities and strategic partnerships with donors such as LuxDev and ADA, the organisation introduced small, low-interest loans tailored for agriculture and petty trade.
In 2019, initial partnerships with the Lao Women’s Union and ADA-LuxDev enabled the Saving and Credit Union to launch its first 20 Village Credit Schemes. The real breakthrough, however, came in 2024 with support from the TACDO Consulting Centre.
“TACDO didn’t just give advice – they walked with us through every rice field and repayment meeting,” the Manager of SCU Mr Bounkhong Padith said.

The Manager of the Saving and Credit Union, Mr Bounkhong Padith.	One of the founding members of the Saving and Credit Union, Mrs Bounlord.

TACDO’s contributions included governance training and risk management for the SCU staff and board, deployment of field assistants, which improved loan recovery rates by 40 percent, and digital tools that replaced paper ledgers, cutting administrative costs by 15 percent.
These interventions played a key role in the SCU’s 2,875 percent profit leap, from 4 million kip in 2023 to 119 million kip in 2024.
Between 2023 and 2025, SCU Soumsonphatana increased its reach to 63 Village Credit Scheme groups and more than 7,500 members, shifted to social enterprise-oriented operations, improving transparency and efficiency, empowered women who now comprise 65 percent of borrowers, and expanded into Khamkeuth and Viengthong districts of Borikhamxay province.
The Saving and Credit Union was recognised by the Bank of the Lao PDR (BOL) in 2021 as a “Model Rural Finance Institution”.
The 2025 Annual General Meeting was both a celebration and a planning session. Key highlights included the approval of the 2025 business plan including mobile banking trials and agriculture-linked loans, election of a new board with 40 percent women members, reforms to loan bylaws and streamlining terms for farmers.
The Annual General Meeting drew endorsements from high-ranking officials, including the BOL, which pledged policy support to replicate the Saving and Credit Union’s model nationwide.
District governors committed themselves to expanding Village Credit Scheme access to three more districts.
As the event drew to a close, SCU’s Honorary Chairperson Mr Thongbay Thongsay, also the Deputy Governor of Borikhan district, delivered a powerful message: “Our history shows that when villagers own their financial system, miracles happen. The next chapter? Bringing this miracle to all of Laos. We really need more support from the Lao government and the donors.”
SCU Soumsonphatana’s journey is just beginning. Plans for the future include expanding digital financial services such as mobile banking, strengthening agribusiness partnerships to link farmers with markets, and supporting policy reforms to enable rural credit unions across Laos.
“From a small village initiative to a district-wide movement, SCU Soumsonphatana proves that financial inclusion can transform lives,” the former SCU manager Mr Bounma Phiathep said.
“Our journey is far from over – we’re just getting started,” he added.

By Bounfaeng/TACDO
 (Latest Update May 7, 2025)