IFC helps Lao businesses to obtain loans
IFC helps Lao businesses to obtain loans
The International Finance Corporation (IFC), a member of the World Bank Group, is helping entrepreneurs in Laos find financing and expertise to grow their businesses, create jobs, improve livelihoods, and spur economic development.
The IFC teamed up with the Lao National Chamber of Commerce and Industry (LNCCI) last week to host a meeting in Pakxe district, Champassak province, to showcase its financing and advisory solutions to businesses in the south of Laos.
One of the greatest challenges facing Lao businesses today is access to finance for expansion.
According to IFC's Doing Business Ranking for 2012, Laos ranks 166th out of 183 economies on getting credit, down from 152nd in 2011, despite the growing number of banks in the country.
Most banks provide loans to real estate projects, as they believe that investment in property is the best guarantee that loans will be repaid. But small and medium d enterprises cannot obtain loans because they have no property with which to secure a loan agreement.
According to a media release from the IFC in Laos, more than 60 private sector representatives attended last week's meeting, including senior members of the LNCCI and local government officials. Aft erwards, the participants visited the Lao Brewery Company's factory in Pakxe, which benefited from an IFC investment four years ago.
“When I served as chief exe cutive officer of the Lao Brewery Company in 2007, I experienced firsthand the benefits that support from IFC can bring. We received a US$9 million loan from IFC, which allowed us to expand the brewery in Pakxe and create 200 new jobs,” said Mr Kissana Vongsay, who is President of the LNCCI.
“Local businesses that participated in the meeting now have a better understanding of what the IFC can offer and they can consider approaching the institution for similar support.”
The IFC and LNCCI have a long-standing partnership, beginning with the establishment and administration of the Lao Business Forum in 2005. The meeting in Pakxe followed a similar event held in Luang Prabang last year.
“We focus on projects that create jobs, raise incomes, and reduce poverty,” said Mr Aimilios Chatzinikolaou, IFC Resident Representative in Laos.
“We do this together with private enterprises, as well as with the government, organisations like the LNCCI, and other local and international partners in the development field.”
The IFC has been active in Laos since 1998, and has provided nearly US$42 million in investments and around US$5 million worth of advisory programmes. In Laos, the IFC seeks to improve the private sector's access to financing, training, and advice; and reduce market barriers, helping businesses reach their full potential and play a vital role in economic development.
vientiane times
