Leasing companies play essential role in poverty reduction: bank official
Leasing companies play essential role in poverty reduction: bank official
Leasing companies can play a key role in poverty reduction by providing poor people with access to essential agricultural equipment, especially machinery for farmwork, according to a senior bank official.
In his opening remarks at a leasing forum in Vientiane on Friday, Deputy Governor of the Bank of the Lao PDR Mr Sonexay Sithphaxay said that at present most leasing companies in Laos offer services only in towns and rural residents are unable to access these services.
“The economy is rapidly expanding year on year and the finance sector is contributing to economic growth and poverty reduction by bolstering the government's efforts to raise Laos above Least Developed Country status by 2020,” he said.
Mr Sonexay said the leasing business was a strong part of the finance sector and it was the government's policy to increase the number of leasing companies operating in various districts.
“This means that people on low incomes would be able to gain access to essential tools including household items and agricultural tools,” he said.
The forum was attended by the representatives of more than 20 leasing companies nationwide, owned by domestic and foreign investors.
Under the supervision of the Financial Institutions Supervision Department of the Bank of the Lao PDR, the expansion of leasing services in Laos is furthering human resource development, services, and management.
Compared to other Asean countries, Laos requires a great deal of improvement in its services and their quality, especially the capacity of leasing managers and technical officers.
In Laos, the Financial Institutions Supervision Department is responsible for the promotion and management of financial institutions by giving permission for them to operate in compliance with the law.
The department has the right to collect information from those institutions, analyses the risk of their business operations and annually monitors them as well as drafting legislation for financial institutions to ensure they are conducting their business within a legal framework.
Reflecting the growth of leasing trends, 14 leasing companies were recorded in 2014, while 21 companies were reported in 2015. In the first three months of this year, 23 companies were recorded, which indicates that the leasing trend is on the increase.
This yea r's forum opened up opportunities for leasing companies and institutions to share their experiences in the business and the challenges they faced.
They also asked the government to provide them with the means to increase the number of their customers.
