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Credit for small firms boosts economic recovery

The Ministry of Industry and Commerce has launched a US$40 million emergency finance support project, backed by the World Bank, to help small and medium-sized businesses recover from the economic slowdown associated with the COVID-19 pandemic.
The project was approved by the World Bank Board of Directors in October 2020 and signed by the government in November.

Representatives of Ngoi district and the company join villagers at the commencement ceremony of the drinking water demonstration project.

Minister for Industry and Commerce, Khemmani Pholsena, declared the Micro, Small, and Medium Enterprise (MSME) Access to Finance Emergency Support and Recovery Project operational, enabling local banks and financial institutions to provide loans to small businesses that have been affected by closed borders and reduced trade over the past year. According to the Lao Statistics Bureau, over 94 percent of all Lao enterprises are microbusinesses.
Three banks, Laos-China, Maruhan, and Sacom  have been selected to participate in the project to lend funds to small companies that apply for loans through a line of credit. The project is providing technical support to the Bank of Lao PDR, which is managing a credit guarantee facility, and technical assistance to strengthen the capacity of participating businesses. More financial institutions are expected to join the project once negotiations on thr terms of lending are complete.
This initiative will reinforce the stability of small businesses, which are vital to the Lao economy, said World Bank Lao PDR Operations Manager, Mrs Viengsamay Srithirath. By making it easier for small firms to access credit, the government and banks are removing one of the top three obstacles for business’ in Laos. Ms Viengsamay congratulated the Ministry of Industry and Commerce for the speedy preparation of the project during a time of economic difficulty, and said its execution would build on the success of the World Banks Small and Medium Enterprise Access to Finance Project, which closed at the end of 2020 after disbursing around 180 loans to small Lao companies.


 

 

By Times Reporters
(Latest Update
February 24,
2021)


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