<Articles>The Excess Funds Problem of the Savings Groups in Laos: Case Study of a Village in Vientiane Municipality

Abstract

There is a tendency that the success of some of the village-level savings groups in Laos inevitably causes an excess funds problem, because the activity of a saving group is confined to a small village territory. Given the lack of efficient and reasonable system for coordinating between funds-surplus and funds-deficit savings groups, the excess funds problem of funds-surplus savings groups leads to a stagnation of such groups, whereas other funds-deficit groups continue to suffer from the fund shortage. The paper, based on a case study of a village in Vientiane Municipality since 2003 until 2012, analyzes how various stakeholders responded to such an excess funds problem with an apparent failure in the study village and alerts the policy-makers in Laos to make necessary measures, since the excess funds problem is also providing a good opportunity to establish a broader and integrated institutional financial system in rural Laos.