Access to finance crucial in Laos' economic development
Access to finance crucial in Laos' economic development
Small enterprises, especially limited companies, will need to have accurate receivable and payable accounts in order to attain easily accessible financial services, the Deputy Governor of the Bank of the Lao PDR, Mr Sonexay Sithphaxay advised a joint seminar on Tuesday.
The Ministry of Planning and Investment in cooperation with the Lao National Social Science Council organised the seminar.
“More than 90 percent of enterprises are currently holding inaccurate bank accounts and they don't have assured assets to propose loans,” Mr Sonexay said.
The Lao Government is encouraging accessible finance in the hope of creating a smoother integration of regional and international sectors such as the upcoming Asean Economic Community in 2015.
The financial sector along with trade, education, transport, foreign cooperation, investment and other sectors are also being prepared for the integration.
The access to finance aims to promote the growth of enterprises in the country, targeting to strengthen the financial status of Laos.
Currently, a total of four banks are state-owned institutes, two are joint venture banks, seven are private banks and three are foreign banks.
“Once the Asean Economic Community arrives, there will be an increase in foreign financial sources due to the integration of the banking sector and improvement of all banking systems,” Mr Sonexay said.
Various Asean banks will be able to bring their knowledge and practices from their own countries to Laos, especially in areas of trade finance, project finance, import and export, operational loans and estate finances.
“Despite the fact that the integration will bring financial sources to several businesses, new competitors will be a challenging issue as well,” he said.
Mr Sonexay said the new competitors would already have well-managed standards, especially in the receivable and payable financial records as they have modern equipment, transparency and could be audited quickly.
Many enterprises in Laos could possibly be associated with global branches in the future and therefore they would gain better credit if they had easily accessible financial services, he said.
Mr Sonexay said the government could play a key role in creating a better environment through generating convenience for business operations based on laws and market strategies.
“Smaller enterprises should be urged to access finance as limited companies so they can grow into public companies and can be listed on the stock market and become financial sources alongside state finance sectors, banks and foreign countries,” he said.
The government also plans to speed up GDP growth to at least 8 percent a year with the hopes of decreasing the poverty rate to 10 percent by 2015. Laos plans to graduate from the list of the World's Least Developed Countries by 2020.
The access to finance for the business sector is considered top priority to ensure Laos' national economic development is moving in the right direction.
vientiane times
