IFC trade financing to aid smaller firms in Laos
IFC trade financing to aid smaller firms in Laos
The International Finance Corporation (IFC) will provide a trade finance line of US$5 million to the BCEL bank to help smaller Lao private companies increase trade, generate foreign exchange and create jobs.
A signing ceremony to finalise a trade line agreement between IFC and Banque pour le Commerce Exterieur Lao Public (BCEL) under the Global Trade Finance Programme was held in Vientiane yesterday.
“Partnering with IFC helps extend the capacity of BCEL in delivering trade finance solutions to local importers and exporters,” BCEL Managing Director Mr Vanhkham Voravong said at the ceremony.
The transaction makes BCEL the first Lao bank to join IFC's Global Trade Finance Programme network. The programme will help BCEL cover payment risk in granting trade financing to local companies, mostly small and medium enterprises, according to a press release.
“As part of the programme's extensive network of more than 400 participating banks, BCEL will be recognised globally and this will further strengthen our international transactions,” Mr Vanhkham said.
IFC's Regional Manager for the Mekong Region, Mr Simon Andrews, said “BCEL's participation in this programme is a significant step in developing Laos' financial sector by connecting Lao banks with their international counterparts.”
“This will help facilitate trade between Lao companies and their overseas business partners,” he added.
In the fiscal year 2012, IFC provided US$2.9 billion to support trade in the world's poorest countries, and 79 percent of all guarantees went to small and medium enterprises, according to the IFC press release.
The Global Trade Finance Programme includes more than 250 partner banks in more than 90 emerging-market countries.
Since its inception in 2005, the programme has issued more than 13,000 guarantees totaling US$20 billion to banks for trade-related payments in emerging markets.
IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector.
It helps developing co untries achieve sustainable growth by financing investment, mobilising capital in international financial mar kets, and providing advisory services to businesses and governments.
In the fiscal year 2012, its investments reached an all-time high of more than US$20 billion, leveraging the power of the private sector to create jobs, spark innovation, and tackle the world's most pressing development challenges.
BCEL was established in 1975 - the same year the Lao People's Democratic Republic came into being. It remains the largest bank in Laos with a market share in excess of 30 percent, and now has 18 branches, 37 service locations, 10 exchange offices and 163 ATM machines across the country.
vientiane times
