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.
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.