The effects of the COVID-19 pandemic on household finances and management in Laos
Abstract
This research explores the borrowing situation in major cities of Lao PDR and assesses the impact of the Covid-19 pandemic on borrowing activities. Data was collected from Lao Telecommunication Customers between August 2021 and January 2022 via a Google Forms questionnaire, involving participants primarily from Vientiane Capital, Luangprabang, Savannakhet, and Champasack. The study employed descriptive and econometric methods to analyze the data. It revealed a substantial portion of participants engaged in borrowing, with patterns influenced by factors such as gender, ethnicity, and borrowing experience. Interest rates increased significantly during the pandemic. Borrowing was mainly for household goods and food consumption. The pandemic led to an increased tendency to borrow and higher borrowing amounts. Policymakers need to address the rising debt and interest rates by providing financial compensation to those adversely affected and implementing measures to control interest rates, loan conditions, and repayment periods. Additionally, government and aid organizations should support those impacted by the pandemic in sustaining their livelihoods.
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References
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