ICBC constantly supporting growth in Laos
ICBC constantly supporting growth in Laos
Industrial and Commercial Bank of China (ICBC) is focusing on financing for various sectors in Laos, which is a developing country in South East Asia. On November 28, 2011,ICBC Vientiane branch (hereafter� the bank") was set up which acted as the first Chinese financial institution to support social and economic development in Laos.
General Manager of the ICBC Vientiane branch, Mr Lu Jian, gave an exclusive interview to Vientiane Times last week, saying The bank gives great importan ce to supporting many sectors such as infrastructure, farming and tourism.
ICBC has seen many chances to grow in Laos as the country requires a lot of funding to stimulate sustainable development.
Laos needs to develop infrastructure such as roads, railways, highways and power in order to drive econ omic growth more strongly and support the expansion of other service sectors.
Mr Lu said the bank will provide loans for development, including farming and the processing of goods for export, noting that Laos is a farming country; however, its products aren't always competitive on the international market.
The tourism industry also has a lot of potential but the development of supporting facilities such as road access is very slow. If this aspect was improved, many more visitors could be expected to come, he predicted.
Social welfare is another sector that yearns for investment and improvement, such as the healthcare and education industries in Laos. But there is not much funding for development in these areas and development is also slow. The bank wants to help improve this area.
Over the past five years of operations in Laos, the total assets of ICBC Vientiane branch had exceeded 33.2 trillion kip (US$4.1 billion), according to the bank's statistics reported on June 30, 2016.
The general manager said Taken from another angle, the bank is a source of foreign direct investment but its purpose is to support development in Laos. We will do everything for the development of the country.
Laos is enjoying a boom in financial services. Policy in this area is wide open for banking investment. Regulations governing banking management open up opportunities for foreign commercial banks to offer services here.
Mr Lu said If we compare the Lao experience with the expansion of the banking sector in China, regulations in other sectors need to be perfected in order to support greater growth in banking as the banking sector can't grow by itself.
Other business sectors also need effective management regulations so that the bank can supply loans, he added.
In the past Laos was known as a landlocked country but this situation is changing with the development of infrastructure. More links with neighbouring countries will create more opportunities for development, Mr Lu pointed out.
Loan and interest policy
The ICBC offers various forms of loan products. Its long term loans cover periods of 5, 10 or 15 years. The bank analyses the information provided by customers. For example, if the investors in a hydropower project can collect a able income over 10 years, the bank will issue a 10-year loan.
With regard to interest rates, the bank uses the rate set by the central bank as a reference.
Mr Lu said ICBC has the worldwide network, and the bank will take this advantage to offer reasonable interest rates to provide customer satisfaction.
However the bank requires projects to meet certain criteria before providing a loan. Projects must be shown to be effective, carry a controllable level of risk, and to be making a profit. If these criteria can be met, the bank will consider issuing a loan.
Moreover, the bank's aim is to make a profit, its intention is to supply financing to projects that are furthering socio-economic development in Laos to international levels.
ICBC attaches importance to supporting domestic companies and urges the media to help promote the bank.
If the Lao economy grows strongly, the bank will benefit and the supply of funding will increase accordingly, Mr Lu said.
In 2012 the bank was authorised by the Bank of the Lao PDR as the RMB clearing bank in Laos.
Although five years is not usually long enough for a company to see significant growth, ICBC prefer to be likened as a tree whose roots have spread deep into the ground. It has played an important role in the success of Laos' development by providing financing for various projects.
The bank issues loans to ordinary customers such as Lao and foreign investors and provides many products to serve the various needs of its clients.
ICBC has been transacting bonds with the Bank of the Lao PDR to support financing for the government, Mr Lu said.
A long with its growth, the bank places importance on human resources development and today has 90 employees of whom 20 percent are Chinese. The bank also provid es training for all its Lao staff.
The bank has assisted with social issues such as by donating to relief efforts in the wake of natural disasters, and has supported handicap activities and educational projects.
ICBC Vientiane branch also aims to finance enterprises going global, which is one of the basic policies of ICBC headquarters. The most important aspect of this is to enhance Laos-China relations.
