Over 32b kip made available for SME growth
Over 32b kip made available for SME growth
The Ministry of Industry and Commerce has provided more than 32 billion kip (about US$4 million) to Saigon Thuong Tin Bank Lao Co., Ltd. (Sacombank Lao) for short and long-term credit to small and medium-d enterprises (SMEs).
A subsidiary financing agreement was signed last Friday in Vientiane between Director General of the SMEs Promotion Department Mr Somdy Inmyxai and General Director of Sacombank Lao Mr Pham Guang Phu.
The event was witnessed by Deputy Minister of Industry and Commerce Mr Siewsavath Savengseuksa.
Sacombank is one of three commercial banks that have received funding from the International Development Association (IDA), a member of the World Bank Group.
This funding is part of US$20 million that the World Bank and IDA has been providing to the Lao government through the SMEs Department for release as short and long-term credit to support the growth and expansion of SMEs. According to the World Bank, SMEs are an important part of the Lao economy and employ a large part of the population.
But less than 20 percent of SMEs can access long-term credit, which makes it difficult for them to grow and compete against other SMEs in Asia.
The newly approved SME Access to Finance Project would provide long-term funds to enable SMEs to purchase new equipment, expand their business premises, upgrade their technology, and scale up their business operations, the World Bank stated.
Sacombank Lao has operated branches for over seven years and was officially upgraded to a foreign investment bank in 2015.
The bank officially opened a branch in Vientiane in May this year as well as another in Pakxe district, Champassak province last month.
Sacombank Lao received funding from the IDA because it demonstrated the capacity to access international funding and had the ability to give advice and solve financial issues for customers, as well as helping business units, especially SMEs, to boost socio-economic development, Mr Pham Guang Phu said.
After receiving the funding for the provision of credit, the bank planned to ensure it was available for SMEs so they can more easily access long-term credit, he added.
