The Fund for the Promotion of Small and Medium Size Enterprises (SME Promotion Fund) will focus on strengthening expertise in businesses, including microenterprises, to prevent further non-performing loans.
The plan was revealed at an annual meeting of the Fund held last week to review the work carried out in 2020 and discuss the plan for this year.
Deputy Minister of Industry and Commerce, Mr Somchit Inthamith, who is President of the Fund’s Executive Board, presented a report at the meeting.
According to the report, the SME Promotion Fund has carried out its operations in line with a government decree concerning the Fund.
It has supervised the release of funds for micro, small and medium sized enterprises (MSMEs) through five commercial banks and the provision of funds to four deposit-taking and non-deposit-taking microfinance institutions. The overall aim has been to provide credit for microbusinesses and commercial producers.
The first use of the SME Fund used government funding of 200 billion kip to provide credit to MSMEs through four commercial banks, help MSMEs boost commercial production in the four priority sectors, and strengthen their expertise.
Under this year’s plan, the SME Promotion Fund will continue with work carried over from last year and will help MSMEs strengthen their expertise as well as provide loans to prevent them being responsible for non-performing loans.
Participants in last week’s SME Promotion Fund meeting came from the National Assembly, Prime Minister’s Office, Ministry of Finance, Ministry of Information, Culture and Tourism, Ministry of Agriculture and Forestry, Ministry of Natural Resources and Environment, Ministry of Planning and Investment, Bank of the Lao PDR, international organisations, business associations, banks, microfinance institutions, and SMEs.
They heard a presentation on a project to promote access to finance by SMEs as well as about the MSME Access to Finance for Emergency Support and Recovery Project in response to the Covid-19 pandemic. This is a new project, for which the government has received a soft loan of US$40 million from the World Bank.
According to a news release issued at the meeting, the government will use US$34 million of the money to provide credit through banks. The remaining US$6 million will be spent on technical assistance to strengthen the capacity of MSMEs, banks and financial institutions participating in the project, as well as related sectors.
Information Source: Vientiane Times