Vientiane, Lao PDR, December 16, 2016—IFC,
a member of the World Bank Group, is promoting movable-asset finance to
support businesses, especially small and medium enterprises (SMEs), to
play a bigger role in the Lao economy.
SMEs make up more than 98 percent of the private sector in Laos, but most
have difficulties in obtaining loans from formal financial institutions
as they do not own adequate land or buildings that banks demand as security.
Finance against movable assets will help SMEs tap their potential by providing
them with the necessary liquidity to run and grow their operations. The
implementation decree on the Secured Transactions Law was issued and the
collateral registry was operational in late 2013 with support from IFC.
Since then, more than 300 business loans have been financed based on movable
Around 100 representatives—including government officials, managers of
local financial institutions, academics, and legal professionals—attended
an International Symposium on Movables Finance in Vientiane today to discuss
concepts and practices in movables lending. Senior international and domestic
speakers introduced established industry practices, latest trends, and
experiences from other countries and discussed the changing environment
for movables finance in Laos and the roles of government and financial
institutions. The event was co-organized by IFC and the Ministry of Finance.
“SMEs are a crucial part of the Lao economy. Promoting access to finance
for SMEs has been a priority for the Ministry of Finance and other government
authorities,” Mr. Somboun Inthapattha, Head of Cabinet, Ministry of Finance.
"Movables finance will increase financial inclusion and benefit the
“Developing a movables-finance market requires understanding and active
participation from various stakeholders,” said Phongsavanh Phomkong, Head
of IFC Office in Vientiane. “In addition to a sound secured-transactions
legal framework, a supportive environment is necessary where lenders are
fully aware that evaluating and monitoring movable assets enable them to
better identify and control the cash-flows of business borrowers. This
can be a safer way to scale up credit to SMEs.”
IFC and the World Bank have supported secured-transactions reform in Laos
over the past years. The objective is to develop a dynamic market for movable-asset
finance in the country. An ongoing advisory project funded by Switzerland,
Canada, and Japan is working to build the necessary elements for the market
to function properly. The symposium followed a two-day technical training
on movables finance offered by IFC and the Ministry of Finance as part
of the effort to strengthen lender capacity in this new business area.
IFC, a member of the World Bank Group, is the largest global development
institution focused on the private sector in emerging markets. Working
with more than 2,000 businesses worldwide, we use our capital, expertise,
and influence, to create opportunity where it’s needed most. In FY15,
our long-term investments in developing countries rose to nearly $18 billion,
helping the private sector play an essential role in the global effort
to end extreme poverty and boost shared prosperity. For more information,