More than 600 businesses in Laos have received support from the Small and Medium Enterprises (SMEs) Access to Finance Project to develop their business and financial plans.
The initiative uses an International Labour Organisation (ILO) tool called Laos In Business, which is being used in 11 provinces.
The project aims to strengthen the capacity of SMEs to access finance and was launched in September 2018.
The final project review of the ILO technical assistance assignment to the SME Access to Finance Project was held in Vientiane on Thursday and funded by the World Bank. The event enabled SMEs to submit relevant documents to commercial banks.
The review was attended by more than 100 participants from governments, the LNCCI membership, and representatives of the private and related sectors.
The meeting was chaired by representatives of the Ministry of Industry and Commerce, Lao National Chamber of Commerce and Industry, and the World Bank.
An ILO representative said future SME programmes would focus on the need to continue supporting the existing Business Development Service (BDS) network and the SME Service Centre, as well as strengthen the link between SMEs and financial institutions at the practical level.
The ILO also requested future SME support to prioritise the participants from this programme given that SMEs have already taken the first step by completing business plans.
The organisation encouraged further dialogue between government, SMEs and commercial banks in order to resolve difficulties that continue to be faced when SMEs attempt to obtain financing.
The ILO also encouraged use of the training tool it had developed jointly with the BDS network to allow for a standardised format for business and financial plans.
SMEs contribute to economic growth, poverty alleviation and shared prosperity in Laos.
The SME sector, including microenterprises, accounts for 99 per cent of the total number of people employed by registered businesses.
About 86 per cent of registered businesses are small, with most having fewer than five employees.
Access to finance remains one of the key challenges for SMEs as many of their operators have limited business management skills, which is an obstacle to their sustainable growth and further job creation.
The development of a competitive and innovative SME sector is a key element in Laos’ national development strategies, as well as in the ILO’s Decent Work Country Programme on the way to achieving Laos’ and global UN sustainable development growth targets.
The ILO has been contributing to the Lao PDR SME Strategy through capacity building for SMEs and other stakeholders.
VIENTIANE TIMES/ASIA NEWS NETWORK