In the green mountains of Viengxay District in Houaphanh Province, where limestone cliffs and caves tell part of Lao PDR's history, a different kind of transformation is underway. 

Thinnakone Bonpaseuth, a 30-year-old entrepreneur, runs a pig breeding enterprise built around a circular production model and strong community outreach. Through his business, he is helping local farmers increase their incomes, strengthen their livelihoods, and build a more resilient future. 

Adapting in the face of change 

As the world marks MSME Day, we recognize the vital role micro, small and medium-sized enterprises play in driving inclusive development. In Lao PDR, MSMEs account for 94 percent of all enterprises and around 80 percent of employment.  

Yet many promising enterprises, including Thinnakone’s, face persistent barriers. Limited access to finance, weak accounting systems, insufficient technical experience, and dependence on local community markets can restrict their ability to grow.   

Unlocking potential through inclusive value chains 

In 2025, UNDP launched the Inclusive Value Chains Programme to help promising enterprises overcome these challenges. The programme provides tailored technical assistance in business development, helping enterprises strengthen operations, improve competitiveness, and create greater benefits for their communities. 

During its pilot phase, eight enterprises from Vientiane Capital and Houaphanh Province were selected from the agriculture, agri-processing, and handicraft sectors, including Thinnakone’s enterprise. 

With tailored business advisory support, Thinnakone diversified into fermented pork products. He now produces more than 600 kg to meet growing customer demand and has built a recognizable local brand. He is also exploring new market opportunities, including cross-border trade with Viet Nam. 

His enterprise now supports more than 60 households, up from 20, with an ambition to eventually reach 3,000 households. Farmers in his network, who once sold raw products, are now engaged in higher-value activities. As the business grows, it is also creating local jobs: Thinnakone has doubled his team and is expanding employment opportunities in his community. 

For Thinnakone, the impact goes beyond profits and revenue:

"What I found most inspiring is that the project's impact extends far beyond individual entrepreneurs. It is creating livelihoods, generating sustainable incomes, and improving opportunities for the wider community." - Thinnakone

His story highlights an important lesson: when local enterprises grow, entire communities can grow with them. 

Turning waste into opportunity 

Thinnakone's enterprise also shows why MSMEs are increasingly recognized as critical drivers of the green transition. Through a circular model, he repurposes pig manure into organic fertilizer, which is used to grow corn and grass to feed more pigs.  

By reducing waste, creating value from existing resources, and strengthening links between agriculture and livestock production, the enterprise is generating environmental benefits for the community. Thinnakone also trains the 60 households in his network to replicate this model, helping ensure that waste-minimizing practices extend across the value chain. 

Yet businesses like Thinnakone's often face a common challenge: securing the capital needed to grow. Although green MSMEs generate environmental benefits and contribute to local economic development, many struggle to access financing because financial institutions perceive agriculture and emerging green sectors as high-risk. As a result, some of the businesses best placed to support the green transition remain underserved by traditional finance. 

Building the finance ecosystem for green growth 

Business advisory support helps enterprises become more competitive, but access to finance remains a critical constraint for many MSMEs. 

To address this gap, UNDP, through the regional Climate Finance Network and with support from the Government of the United Kingdom through the FCDO CARA Programme, is developing a Green Blended Finance Facility. The facility aims to unlock private investment in sectors such as sustainable agriculture, eco-tourism, and renewable energy. 

Rather than relying on limited public aid alone, the facility is designed to act as a financial catalyst. By using public funds to absorb initial risks and offer more favorable loan terms, it can help make green projects more attractive to commercial lenders. 

UNDP is also providing local banks with technical assistance and capacity-building to better understand climate risks and recognize emerging green markets. This support will help financial institutions design and launch lending products tailored to eco-conscious businesses. 

Together, these efforts aim to create a more enabling ecosystem where entrepreneurs can access both the skills and financing needed to grow. 

A pathway to inclusive development 

Thinnakone's journey demonstrates what is possible when local entrepreneurs receive the right support at the right time. 

With stronger business capabilities, better market connections, and improved access to finance, MSMEs can become powerful drivers of inclusive growth. They can create jobs, strengthen rural livelihoods, build resilience to economic shocks, and contribute to a greener and more sustainable future. 

In Houaphanh Province, that future is already taking shape—one enterprise, one farmer, and one community at a time. 

Authors: Saysi Sayaseng, Yassmeen El-Hariri, LongChing Lo, Lackuna Alounthong