Agricultural production loans increase
Agricultural production loans increase
The bank sector has confirmed that loans for agricultural production and livestock breeding activities increased almost 30 percent annually and it is confident this will contribute to upgrading the livelihoods of local farmers.
In the past two years a total of 150 billion kip has been provided for agricultural production and livestock breeding activities, especially in the Samsang (three builds) targeted villages nationwide.
The information was given in response to questions by Members of the National Assembly at a recent meeting, asking the bank sector to provide more loans for production rather than infrastructure construction projects.
Governor of the Bank of the Lao PDR (BOL) Dr Somphao Phaysith spoke to members of the press in Vientiane recently noting that the bank sector is undertaking an initiative of the Party to focus on providing the low-interest loans to the production units.
He noted that the provision of the low-interest rates by the lenders will help farmers promote effective management of their funds.
According to Dr Somphao, 109 families from a total of 51 targeted villages across the country have now become model families in the effective management of funds in production activities.
Earlier this year, Nagnobay Bank, one of the state-owned banks, on behalf of the government, gave loans of billions of kip to rice farmers and crop growers nationwide in an effort to promote the dry season growth period.
Dr Somphao said the loans were mainly provided to production groups with short-term, mid-term and long-term loans.
“This particular loan, a total of 150 billion kip was given to pilot villages for samsang projects,” he said.
The banking system now faces repayment issues after it provided loans to the companies that made prior investments in developing state infrastructure projects.
Many companies were unable to repay their bank loans within the required time due to the government failing to pay them for their work amid ongoing budget tensions.
“The bank sector has decided to halt the provision of loans to more than 400 companies that conducting prior investment for state infrastructure projects. But this action won’t affect the growth of the economy and there are no negative impacts on loans at all,” he stressed.
Dr Somphao reaffirmed that the banking system is still in a secure position.
vientiane times
