Registry to help SME expansion
Registry to help SME expansion
The country's first online secured transaction registry was officially launched in Vientiane yesterday to help improve access to finance for the many micro, small and medium enterprises in Laos.
Under the system, businesses and individuals will be able to pledge moveable assets like equipment, crops and livestock as collateral for loans.
Lao banks currently typically accept only real estate as security for loans as they have had no means of securing their interest in moveable assets.
The web-based system, which has been launched by the International Finance Corporation (IFC) and the Ministry of Finance, makes registration easier and faster, which in turn helps banks speed up their lending decisions, reduce lending risks and increase transparency.
Deputy Minister of Finance, Mr Santiphab Phomvihane, said the registry would expand loan opportunities for the micro, small and medium enterprises that make up about 90 percent of the Lao private sector.
“The new secured transaction registry system marks a milestone not only in modernising the Lao PDR's financial infrastructure, but also in providing access to finance for smaller business, most of which do not own land or buildings to ser ve as security for loans,” he said.
Mr Santiphab said the IFC had worked with the ministry's State Assets Management Department, which will operate the registry, to improve the secured transactions system in Laos by revising the legal framework, providing training to officials and raising public awareness of the advantages of moveable asset-backed lending
IFC Access to Finance Manager for East Asia Pacific, Ms Rachel Freeman, said access to credit was one of the key obstacles hindering Lao business growth.
She said the new system would unlock affordable financing for small and medium enterprise, helping them expand and create more jobs.
The registry was officially launched in Vientiane yesterday by Mr Santiphab, Ms Freeman and US Ambassador to Laos, Mr Daniel A. Clune.
Work on the registry began in 2010 as a collaborative project between the ministry, the IFC, the Asian Development Bank and the US Agency for International Development.
The project has involved feasibility studies, hardware and software purchases, system development, technical training, establishing management rules and the production of a guide for final implementation.
IFC's advisory work is carried out in partnership with Canada, Finland, Ireland, the Netherlands, New Zealand and Switzerland.
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