BOL releases 2,524b kip of credit over past five years
BOL releases 2,524b kip of credit over past five years
The Bank of the Lao PDR (BOL) has raised 2,524 billion kip over the past five years which it has disbursed as credit for production and business units through state banks, contributing to goods production and helping to ease poverty.
Of the total, 25 percent of credit released went to agricultural projects, 36 percent to animal breeding projects, 12 percent as loans to companies to purchase agricultural products, 3 percent to build agricultural processing factories, and 24 percent to other areas.
BOL Governor Mr Somphao Phaisith told media recently the central bank has released credit in line with its production promotion policy by clearing interest from the government and mobilising funding for credit release with low interest. The release of credit aims to boost production, which is a priority for poverty reduction plans and to provide loans carrying 3 and 4 percent interest rates to villages and districts that have initiated the Party's decentralisation policy, known as the “Three Builds” (Sam Sang).
Up until March this year, Nayobay Bank had released 1,375 billion kip in credit for poverty reduction projects and implementation of the Sam Sang directive. Of this amount, 63 percent went to 64 target poor districts, 5 percent to 64 focal areas of government and the provinces, 5 percent to Sam Sang focal areas, and 25 percent to production centres outside target districts.
The release of credit has enabled business units, households and operators to actively contribute to national economic development and the national socio-economic development plan. In particular, production has risen, especially of cassava, sweetcorn, coffee, beef, pork, fish and chickens.
Agricultural processing factories that supply goods to domestic and export markets have created jobs in local communities as well as generating income for overall public benefit.
In regard to poverty alleviation, some 53,368 poor families have been able to access sources of funding, while 5,737 families and 1,143 villages in 10 target districts have risen above poverty.
There are 38 model projects for goods production, and 199 families and 71 model villages for domestic production in 24 poor districts.
Mr Somphao said that from 2008-2013 the banking sector had released total credit of 36,013 billion kip or 45 percent of Gross Domestic Product, which was 43.45 percent more than previously.
Commercial banks have provided credit with interest rates in keeping with market mechanisms. Industry has received 11 percent of credit issued, the construction sector 17 percent, forestry 8 percent, commerce 21 percent, the service industry 15 percent, handicrafts sector 5 percent, transport and posts 4 percent, and other sectors have received 19 percent.
When considered from the angle of enterprise , 18 percent of credit issued has gone to small enterprises, 13 percent to medium enterprises, 57 percent to large enterprises and 12 percent to individuals and household operators.
vientiane times
