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IFC Helps Lao PDR Expand SME Financing With New Online Secured Transaction Registry


In Vientiane:
Kalakate Xaythanith
Phone: +856 21 266309
E-mail:
kxaythanith@ifc.org


Vientiane, Lao PDR, November 20, 2013—IFC, a member of the World Bank Group, helps widen access to finance for Lao PDR’s many micro, small and medium enterprises by supporting the Ministry of Finance in the development of an online secured transaction registry that is launched today.

The Registry for Security Interests in Movable Property is the country’s first system to enable businesses and individuals to pledge movable assets such as equipment, crops, livestock or future income as collateral for loans, expanding loan opportunities for the micro, small and medium enterprises that comprise more than 90 percent of the country’s private sector. Lao banks typically accept only real estate as security for loans, as they had no means of securing their interest in movable assets.

“The new secured transaction registration system marks a milestone not only in modernizing Lao PDR’s financial infrastructure, but also in improving access to finance for smaller businesses, most of which do not own land or buildings to serve as security for loans,” said Santiphab Phomvihane, Lao PDR’s vice minister of finance.

IFC has been working with the ministry’s State Assets Management Department, which operates the registry, to improve the secured transactions system in Lao PDR, including revising the legal framework, providing training to officials, and raising public awareness of the advantages of movable-asset-backed lending. The web-based system makes registration easier and faster, which in turn helps banks speed up their lending decisions and reduce lending risks.

“Access to credit is one of the key obstacles hindering Lao businesses’ growth,” said Rachel Freeman, IFC’s access to finance manager for East Asia Pacific. “The new secured transaction registry will unlock affordable financing for small and medium enterprises, helping them expand and create more jobs.”

IFC, the Asian Development Bank and the United States Agency for International Development have supported the Ministry of Finance in developing the legal framework for secured transactions as well as this registry. IFC’s advisory work is carried out in partnership with Canada, Finland, Ireland, the Netherlands, New Zealand, and Switzerland.

About IFC

IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector. Working with private enterprises in more than 100 countries, we use our capital, expertise, and influence to help eliminate extreme poverty and promote shared prosperity. In FY13, our investments climbed to an all-time high of nearly $25 billion, leveraging the power of the private sector to create jobs and tackle the world’s most pressing development challenges. For more information, visit www.ifc.org.
 
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