Laos: IFC, ACLEDA Bank team up foster SME financing
VIENTIANE (Vientiane Times/ANN) - IFC, a member of the World Bank Group, and TMB Vientiane Branch of TMB Bank Public Company Limited, Thailand are partnering to provide a US$9.1 million equivalent in Lao Kip denominated financing via ACLEDA Bank Lao Ltd.
The funding will help ACLEDA Bank Lao bolster access to finance for the country’s small and medium enterprises, especially women-owned SMEs, to expand production and grow businesses.
With the local currency loan from TMB Vientiane Branch, backed by IFC’s credit guarantee, ACLEDA Bank Lao, a leading bank for the country‘s smaller businesses, aims to increase its SME lending to about US$60 million to more than 3,000 SMEs by the end of 2021.
Specifically, 50 percent of the funding will be exclusively earmarked to women-owned SMEs.
This is the second local currency loan by a Thai Bank to ACLEDA Bank Lao backed by an IFC guarantee.
Speaking at a media conference, Head of Office’s IFC Laos Mr Phongsavanh Phomkong said the ACLEDA Bank Lao is a leading bank for proving loans for SMEs in Laos with a focus on the women-owned enterprises.
“Obviously, the half of this financing is set to focus on women-owned businesses. We also believe that ACLEDA Bank Lao is already for the task performance,” he said.
Meanwhile, the Managing Director and CEO of ACLEDA Bank Lao Ltd Mr Narin Phon said the provision of the financing by TMB backed by IFC would enable to promote the access to finance for rural borrowers.
“Currently, the bank has already provided loans of up to US$130 million equivalent Lao Kip financing to more than 37,000 families across Laos.
About 98 percent of loans are in Lao Kip financing and only two percent in foreign currencies,” he said.
“We seek to increase our reach to SMEs, especially at the lower end of the pyramid and in rural areas, as well as women-run and women-managed businesses,” Mr Narin said.
The credit guarantee by IFC was made with support from the Global Small and Medium Enterprise Finance Facility and the Women Entrepreneurs Opportunity Facility (WEOF).
Launched in March 2012, the Global Small and Medium Enterprise Finance Facility, for which IFC acts as an implementing entity, is a blended finance vehicle mobilising funding from donors, international financial institutions and the private sector to expand lending to smaller businesses in emerging markets.
WEOF is the first-of-its-kind global facility dedicated to expanding access to capital for women entrepreneurs.
It was launched by IFC, through its Banking on Women programme, and Goldman Sachs 10,000 Women initiative in 2014.
IFC’s Banking on Women program is playing a catalytic role in helping financial institutions meet the needs of women entrepreneurs sustainably and profitably.
The programme has committed 49 investments globally, totalling over US$1.5 billion, and undertaken 36 advisory projects since its launch in 2010.