New microfinance institution to offer lower interest loans
New microfinance institution to offer lower interest loans
The newly-launched Sin Ou Dom Phatthana Non-Deposit Taking Microfinance Institution is now set to be one of the best options for local family firms seeking funds for operating their businesses.
The new institution, located at Xangkhou village in Xaythany district, Vientiane, aims to provide financial services to small businesses and help strengthen the livelihoods of families on the outskirts of Vientiane.
Presently, many people in local communities have a difficulty accessing finance for small business operations.
Speaking at a formal launch of the institution, Vice Chairman of the Management Board MrKongpasaSengsourivong said his microfinance institution aimed to contribute to income generation for local family businesses.
“We sincerely intend to minimise financial problems and help people to stay away from illegal financial providers with higher interest rates,” he said, saying the microfinance institution would offer customers reasonable interest rates while operating under the law and regulations of the Bank of the Lao PDR (BOL).
MrKongpasa said a good point about the institution was it could provide funds for lenders who had less ability to access finance from a bank and it had shorter loan approval times.
With registered capital of 200 million kip, it initially intends to expand its financial services to rural communities on Vientiane outskirts where the people are in need of funds to improve their livelihoods by expanding their small family businesses.
“Until the end of this year, we hope to provide services up to 300 customers and obviously the rate of interest will be lower than unregulated lenders. Also, customers will be judged and categorised by their capacity and ability to pay both capital and interest monthly,” MrKongpasa said.
He also added for loans of under 5,000,000 kip they would charge between three and five percent interest per month while the rate on loans of up to 50 million evaluated carefully depending on the risk.
Currently the microfinance sector is steadily growing in Laos and there are 176 financial institutions including 60 non-deposit taking microfinance institutions, according to the BOL.
