The Nang Fa fund of Lao National Chamber of Commerce and Industry and Sacombank are collaborating in the provision of loans to spur the growth of small and medium-sized enterprises (SMEs) in Laos.

An agreement on the initiative was signed in Vientiane on Saturday by the president of the Lao National Chamber of Commerce and Industry, Mr Oudet Souvannavong, and General Director of Sacombank, Pham Quang Phu.

The signing was witnessed by Deputy Minister of Information, Culture and Tourism, Mr Savankhone Razmountry.

Speaking at the event, Mr oudet said “The provision of loans through this new partnership is an innovative system for Laos.”

At present, business owners and farmers who apply for a bank loan must be able to offer land or a house as collaboral before a bank will give them a loan. But that won’t be a problem under the newly introduced loan model.

SMEs in need of a loan do not need to go to Sacombank to negotiate the transaction themselves because the Nang Fa Fund run by the Lao National Chamber of Commerce and Industry will authorize the loan and act as a guarantor with the bank on their behalf.

This mean that farmers and business operators don’t have to offer their land or house to the bank as a form of security.

The loan cooperation agreement was signed at this point in time so that farmers and business owners can receive assistance quickly, with an initial tranche of 300 million kip being offered to SMEs.

It is envisaged that the loans will enable farmers to set up places to sell their produce and provide them with buyers or middlemen. Initially, these points of sale will be at the That Luang esplanade and near the Mekong River.

Sacombank’s General Director, Pham Quang Phu, said economic activity was the heart of Laos and the new loan system would enable SMEs to grow without being burdened by the need for collateral.

#Vientiane Time