Govt to promote SME sector development
Govt to promote SME sector development
The government anticipates promoting the development of small and medium enterprises (SMEs) as a key element to boost the growth of the Lao economy in the years to come.
After Laos becomes part of the Asean Economic Community (AEC) at the end of this year, the country will have another few years to improve various remaining necessary measures in order to fully integrate with the region.
Deputy Director General of the Small and Medium Enterprise (SME) Promotion Department under the Ministry of Industry and Commerce Mr Sa Siriphong said recently that the SME development plan of the government is to focus on the agro-processing industry, tourism and services.
“The government is trying to help the SME sector through the provision of necessary guidelines and policies in relation to business operations; however the projects financed by development partners will also be a key factor to promote the SME sector in Laos,” Mr Sa said.
Meanwhile Vice President of the Lao National Chamber of Commerce and Industry Mr Thanongsinh Kanlagna also told media at a r ecent business meeting that the development of the SME sector is critically necessary for the nation's economic development.
“Obviously, the SME sector plays a crucial role in economic development, for example one of the world's developed countries like Japan also benefits about 96-97 percent from the SME sector,” M r Thanongsinh said.
He noted that the SME sector is certainly important to the development of the Lao economy because it not only generates income but also creates considerable employment, so it is crucial to promote the SME sector.
As part of the development efforts, the Business Assistance Facility (BAF), a project co-financed by Australia, the European Union, Ireland, America, Germany and the World Bank is designed to support the SME sector in Laos through effective business plans and the growth of business operations.
The BAF is a subcomponent of the diversification and competitiveness component of the Second Trade Devel opment Facility Project (TDF-2).
The project provides funds to the private business sector in various fields, for technical training sessions, marketing research, development and improvements to production processes, business and marketing plans and attending trade fairs.
Recently the Lao government has improved the rates of bank loans in an effort to promote small and medium enterprises in Laos, which is one of the important steps for SME promotion, however the local SME sector is still seeking easier access to finance.
While the world economy has been recovering slowly the Lao economy has continued growing remarkably over the past few years. The growth has come largely thanks to expansion in agricultural production, services, electricity and mining.
A senior economist at the World Bank also suggested throug h a video conference to announce the latest World Bank Report recently that the rapid growth of the Lao economy is directly supported by robust investment in the power sector but the government should also look at the agriculture sector as most people are still employed in this sector of the economy.
According to a 2013 report from the National Statistics Bureau, more than 124,873 SMEs, including grocery shops, wholesale and retail businesses, had registered with the Ministry of Industry and Commerce.
A total of 124,873 business units were able to boost job employment by almost 600,000 positions, spread across each business sector.
The report also revealed that trade, wholesale and retail businesses and vehicle repair shops accounted for 62.8 percent of SMEs, with accommodation and food services sharing 11.7 percent, the processing industry covering 12.5 percent, and other small businesses sharing 11.2 percent.
A recent re port unveiled that only 2 percent of the population were SME entrepreneurs, which is a low figure compared to the total population, so improvements within this sector still require close attention from the government.
