ACLEDA Bank to disburse German microfinance funds
ACLEDA Bank to disburse German microfinance funds
ACLEDA Bank Lao Ltd expects to receive funds worth about 33.25 billion kip (3 million euros) from the Lao government to disburse as loans for small and medium- enterprises (SMEs).
“I think that the bank may get that money within the next few months,” the bank's CEO and Managing Director Mr Narin Phon said yesterday.
“We will get that money in Lao currency so it can easily be given out in loans.”
Mr Narin said the money the bank will receive from the government is a grant from Germany that was secured after an agreement was signed between the Lao government and KfW on access to microfinance in rural areas, aiming to provide finance for the poor.
Germany is supporting the sustainable economic growth of the Lao economy by enhancing the business environment for Lao entrepreneurs and the banking sector.
ACL EDA Bank Lao will get the money from the government in the form of a six-year loan and will have to pay the principle and interest of 10 percent per annum to the government.
Mr Narin said once the bank gets the money it expects to disburse loans to the SME sector with interest rates of about 15 or 16 percent per annum. Each customer will be eligible for loans of up to about 100 million kip.
“However we must have a more detailed discussion with the related organisations on the disbursement of loans,” Mr Narin said.
The organisations include the Bank of the Lao PDR (BOL), ACLEDA Bank Lao and KfW, formerly KfW Bankengruppe, a German government-owned development bank based in Frankfurt.
The grant of 3 million euros will be provided to the BOL through KFW to establish the Lao Access to Finance Fund, also known as the LAFF.
This fund will provide local currency loans to eligible banks in order to refinance loans to micro, small and medium enterprises.
The interest paid by the banks will be used to increase the capital stock of the fund. In addition, the programme offers capacity building to selected banks to qualify for loans from the LAFF.
Three banks will participate in the first round of the programme. ACLEDA bank Lao is the first bank to qualify and the intended beneficiary of a local currency loan.
The Agricultural Promotion Bank and Lao Development Bank will engage in capacity-building measures before receiving a similar loan.
The aim of the programme is to facilitate access to long-term finance through the domestic banking sector for micro, small and medium enterprises.
Eligible banks can access a refinancing facility and capacity-building measures tailored to these businesses.
The rationale for focusing on these entrepreneurs is their high impact on poverty alleviation through creating jobs and generating income.
vientiane times
