Vientiane, Lao PDR, January 28, 2014—IFC,
a member of the World Bank Group, is helping improve access to finance
for Lao micro, small and medium businesses by assisting the Ministry of
Finance in introducing “movable-asset” financing in the country.
In Lao People’s Democratic Republic, small and medium enterprises often
do not own land or buildings that can be offered as security for loans.
If banks accept movable assets such as machinery, crops, inventory, or
livestock as collateral, smaller businesses will find it much easier to
“Getting loans is one of the top challenges faced by Lao small and medium
enterprises,” said Chanthanom Phithasone, Director General of the State
Assets Management Department under the Ministry of Finance. “Introducing
movable-asset lending will unlock significant and affordable financing
for these businesses, marking a milestone in the development of Lao’s
With support from IFC, the ministry held a workshop today to introduce
movable-asset financing to banks, lending institutions, business associations,
and regulators. The participants discussed ways to overcome the challenges
that Lao PDR will likely encounter in introducing the financing method
and shared lessons learned from other countries.
IFC has previously helped China and Vietnam set up centralized online registries
for movable assets so that banks can more easily gauge the creditworthiness
of borrowers and make quicker lending decisions, thus expanding financing
for small and medium enterprises. This helps smaller businesses grow and
create more jobs, benefitting the local economy.
“Movable-asset lending can be a profitable way for banks and other lending
institutions to tap into the small business market in Lao PDR,” said Jinchang
Lai, IFC Principal Operations Officer and Lead for Financial Infrastructure,
East Asia & Pacific Advisory Services. “While most small and medium
businesses do not have real estate to offer as collateral, they do have
some movable assets. IFC and the Ministry of Finance are helping lenders
increase their understanding of the benefits of lending based on movable
assets. Using the online registries for movable assets will make it easier
for lenders to obtain reliable information about their clients and also
incentivize clients to repay.”
IFC has been working with Lao PDR’s Ministry of Finance to establish an
online registry for secured transactions involving movable assets and provide
training to officials. The project is carried out in partnership with the
Swiss government and the US Agency for International Development.
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and influence to help eliminate extreme poverty and promote shared prosperity.
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