Logo of Phnom Penh Post newspaper Phnom Penh Post - Laos’ central bank set to use $300M Chinese loans for SME financing

Laos’ central bank set to use $300M Chinese loans for SME financing

Laos’ central bank set to use $300M Chinese loans for SME financing

The Bank of the Lao PDR (BOL) is gathering information on commercial banks as it expects to allocate credit for small and medium-sized enterprises (SMEs).

Twelve commercial banks involved in the government’s SME promotion project will receive loans totalling $300 million from the China Development Bank (CDB).

Governor of the Bank of the Lao PDR Sonexay Sithphaxay last week reported to the annual meeting of the planning and finance sector on the funding process and distribution of the loan to participating banks.

The $300 million loan from the China Development Bank will be delivered to the banks for use by SMEs in three phases, with each comprising $100 million.

“We are collecting information about the readiness of the banks involved in the initiative on SME funding before submitting a request to the CDB for the withdrawal of the first tranche of $100 million at the end of this year,” Sonexay said.

It is hoped that the $300 million provided by the CDB will enhance the ability of Lao banks to finance SMEs.

During the annual meeting, the central bank highlighted its achievements in the first 11 months of this year, noting that overall deposits exceeded 90,000 billion kip in the banking system nationwide.

This was a 13 per cent increase in total deposits compared to last year, equal to 55 per cent of GDP, while the goal set was 59.8 per cent.

“This is a clear consequence of the economic downturn, meaning that members of the public or depositors are unable to deal with proper savings or deposit money in banks,” Sonexay said.

He reported that 79,000 billion kip out of 90,000 billion kip was loaned to borrowers, comprising about 80 per cent of total deposits.

Sonexay said banks had worked hard to minimise burdens and provide borrowers with access to finance, but that in some cases loan applicants were unable to meet banks’ lending criteria.

In 2020, BOL as the nation’s central bank will continue to partner with various sectors to roll out important policies related to the management of foreign currencies, debt, and exchange rates, and other issues.

The annual meeting of the planning and finance sectors was co-chaired by Deputy Prime Minister and Minister of Planning and Investment, Sonexay Siphandone, and Deputy Prime Minister and Minister of Finance, Somdy Duangdy.



  • Phnom Penh placed in two-week lockdown

    The government has decided to place Phnom Penh in lockdown for two weeks, effective April 14 midnight through April 28, as Cambodia continues to grapple with the ongoing community outbreak of Covid-19, which has seen no sign of subsiding. According to a directive signed by Prime Minister

  • Cambodia on the verge of national tragedy, WHO warns

    The World Health Organisation (WHO) in Cambodia warned that the country had reached another critical point amid a sudden, huge surge in community transmission cases and deaths. “We stand on the brink of a national tragedy because of Covid-19. Despite our best efforts, we are

  • Hun Sen: Stay where you are, or else

    Prime Minister Hun Sen warned that the two-week lockdown of Phnom Penh and adjacent Kandal provincial town Takmao could be extended if people are not cooperative by staying home. “Now let me make this clear: stay in your home, village, and district and remain where

  • Vaccination open to foreigners in Cambodia

    The Ministry of Health on April 8 issued an announcement on Covid-19 vaccination for foreigners residing and working in Cambodia, directing the Ministry of Labour and Vocational Training and local authorities to register them. Health minister Mam Bun Heng, who is also head of the inter-ministerial

  • Culture ministry: Take Tuol Sleng photos down, or else

    The Ministry of Culture and Fine Arts has told Irish photographer Matt Loughrey to take down the photos of Khmer Rouge victims at Tuol Sleng Genocidal Museum which he allegedly colourised and altered to show them smiling. The ministry said Loughrey's work is unacceptable, affecting

  • Cambodia gears up for muted New Year festival

    The recent curfew and restrictions imposed in the capital and other Covid-19 hotspots were intended to break the chain of transmission, Ministry of Health spokeswoman Or Vandine said as municipal and provincial authorities issued new directives banning certain activities during the upcoming Khmer New Year