Domestic goods are competitive but access to funds to boost production is still limited due to the requirements or criteria set by commercial banks.

Govt to focus on promoting domestic production, MSMEs

A total of 185 micro, small and medium-sized enterprises (MSMEs) have been provided 274.01 billion kip by commercial banks out of funds allocated by the government to promote the sector.
MSMEs also accounted for 32.95 percent of all the approved loans provided by commercial banks to 44,258 entities. The National Assembly acknowledged the coverage of 35 percent of all MSMEs by 2023.
The credit available for MSMEs is now recorded at 14,589.98 billion kip, or 14.03 percent of the gross credit of all commercial banks, according to a report presented by the Deputy Prime Minister, Dr Sonexay Siphandone, at the ongoing NA session on Monday.
He noted that the agriculture and handicraft sectors received promotional funds amounting to 6.18 percent of the gross credit of the commercial banks. The National Assembly had approved 5 percent of the gross credit of all commercial banks for MSMEs by 2023.
Alongside the update on the implementation of targets set for promoting MSMEs, the DPM informed the NA members that the government is working to promote domestic production in order to minimise the trade deficit with key foreign trade partners.
The hardships faced by businesses in Laos in recent years because of the Covid-19 pandemic has added to the challenges of the public and private sectors.
“However, the government has arranged billions of kip and allocated these funds to various commercial banks to provide loans to the business sector, especially prioritised sectors such as the agricultural processing industry, handicrafts, crop planting and animal rearing, and tourism,” he said.
In mid-2020, the government directed commercial banks and financial institutions to postpone the repayments of debts and decreased  interest rates.
In late May this year, the commercial banks successfully implemented the monetary policy with 5,550 customers, worth over 11, 13 billion kip, and the financial institutions delayed payments of 2,479 customers with total credits of 7.39 billion kip.
In addition, the government’s remaining funds for responding to challenges posed by Covid-19, especially for the post-pandemic recovery of business and trade, was recorded at 1,661.2 billion kip.
The agricultural sector accounted for 51.62 percent of all the approved funds, with allocations being used for investments in poultry and livestock breeding and other agricultural purposes.
A total of 27.24 percent of these funds were loaned for animal feed production, processed coffee products, garment factories and other manufacturing units.

By Times Reporters
(Latest Update June 21, 2022)