Logo of Phnom Penh Post newspaper Phnom Penh Post - Germany backs access to finance for Lao MSMEs

Germany backs access to finance for Lao MSMEs

Content image - Phnom Penh Post
The grant of €6.8 million will be provided to the Bank of the Lao PDR through the KfW Development Bank. VIENTIANE TIMES/ASIA NEWS NETWORK

Germany backs access to finance for Lao MSMEs

Germany has approved an additional US$7.7 million for the Lao Access to Finance Fund (LAFF) to facilitate access to long-term finance for households and micro, small and medium enterprises (MSMEs) in rural areas.

The grant of EUR 6.8 million will be provided to the Bank of the Lao PDR through the KfW Development Bank.

This fund will also continue to strengthen capacity building for the Bank of the Lao PDR and partner financial institutions.

The contribution of Germany also continues to support the sustainable growth of the Lao economy by enhancing the business environment for MSMEs.

A handover ceremony for phase II of the Financing Agreements took place on Friday at the Bank of the Lao PDR.

The event was attended by Deputy Governor of the Bank of the Lao PDR, Mrs Vatthana Dalaloy; German Ambassador to the Lao PDR, Mr Jens Lütkenherm; and Country Director of the KfW Office in Vientiane, Mr Jan Wiegelmann. Representatives of LAFF committees and finance ministry officials were also present.

The Bank of the Lao PDR will act as the Project-Executing Agency for the Lao Access to Finance Fund.

With the additional grant of EUR 6 million provided by Germany, the Fund will be able to extend the number of qualified partner financial institutions substantially, with banks and microfinance institutions able to allocate loans of up to LAK 500 million each to eligible MSMEs in rural areas.

Germany has provided an additional EUR 0.8 million for capacity building to strengthen the systems of the Bank of the Lao PDR and partner financial institutions of the Lao Access to Finance Fund. Speaking at the ceremony, Mrs Vatthana said “There is a great need for access to smaller sized loans for MSMEs, particularly in rural areas of the country.”

She said the additional funds for the LAFF would be able to accelerate access to funding for a much larger number of MSMEs.

“In addition, the Fund will contribute to the institutional strengthening of partner financial institutions of the Fund, which is necessary for the development of the Lao financial system,” she added.

German Ambassador Mr Jens Lütkenherm said the Fund would fill a significant gap, especially in rural areas, by enabling local entrepreneurs who run MSMEs to access financial services through the formal banking system and microfinance institutions.

“We do believe that with the additional funding, the Fund will be able to work with more partner financial institutions and it will be an effective tool to provide entrepreneurs with the necessary funds to develop their businesses, thus supporting the economic development of Laos and the well-being of its people.”

The primary purpose of the project is to support the commercial financial sector of Laos in providing sustainable and needs-based financial services to MSMEs in rural areas. This will contribute to improving private sector productivity and competitiveness and consequently support the creation of jobs and reduce poverty.

VIENTIANE TIMES/ASIA NEWS NETWORK

MOST VIEWED

  • Ministry taking steps over Thai ‘replica’ of Angkor Wat

    The Ministry of Culture and Fine Arts has dispatched experts to inspect the ongoing construction of a temple in Wat Phu Man Fah, located in Thailand’s Buriram province. This temple appears to be a replica of Cambodia’s renowned Angkor Wat. The ministry said

  • Ream base allegations must end, urges official

    A senior government official urges an end to the allegations and suspicions surrounding the development of Cambodia’s Ream Naval Base, now that Prime Minister Hun Manet has addressed the issue on the floor of the 78th UN General Assembly (UNGA 78). Jean-Francois Tain, a geopolitical

  • Cambodia claims int’l titles in eight-sided arena

    Three prominent Cambodian Kun Khmer fighters – Thoeun Theara, Phal Sophorn and Roeung Sophorn – all claimed International Professional Combat Council (IPCC) world titles at the September 30 octagonal ring event at Town Arena, although popular Kun Khmer exponent Prum Samnang failed to secure a win in his

  • PM to open new Siem Reap int’l airport December 1

    Prime Minister Hun Manet and Chinese leaders would jointly participate in the official opening of the new Chinese-invested Siem Reap-Angkor International Airport on December 1. The airport symbolises a new page in the history of Cambodian aviation, which will be able to welcome long-distance flights to

  • CP denied registration documents by ministry

    The Ministry of Interior will not reissue registration documents to the Candlelight Party (CP). Following a September 21 meeting between ministry secretary of state Bun Honn and CP representatives, the ministry cited the fact that there is no relevant law which would authorise it to do

  • Rapper VannDa bridges borders with beats

    Born in a bustling Cambodian market, a young dreamer named VannDa found his rhythm amid the clatter and chaos. Today, his beats resonate far beyond the shores of his homeland, streaming on platforms like Spotify and capturing the imaginations of hip-hop fans in the region