LAO PDR (Vientiane Times) - A package of US$300 million has been loaned by the government of China to bolster small and medium sized enterprises (SMEs) in Laos, which will be soon available to borrowers at the country’s leading banks.
The multi-million dollar loan is a part of the cooperation pact signed by Lao and Chinese officials during a recent working visit by a high-ranking Chinese delegation to Laos, led by Chinese President Xi Jinping. The Bank of the Lao PDR (BOL), on behalf of the government, inked the loan agreement with the China Development Bank, assigned by the government of China. The loan agreement was signed in Vientiane on Wednesday by BOL’s Deputy Governor Mrs Vatthana Dalaloy and President of China Development Bank’s Yunnan Branch, Mr Hong Zhenghua. The ceremony was witnessed by BOL Governor Mr Sonexay Sithphaxay along with officials from relevant ministries and banks in Laos. The loans issued by the China Development Bank will be divided into three transactions of US$100 million, each based on the memorandum of understanding signed by both parties, according to a report by a senior BOL official. BOL, on behalf of the government, is hopeful that the US$300 million in financing will bolster the capacity of commercial banks to provide finance to SMEs in Laos. Once Laos’ SMEs are successfully financed, they will prioritise agricultural production for regional markets, including China. The agriculture sector is considered to be the economic foundation of Laos, but it has not grown as anticipated.
At a recent ordinary session of the National Assembly, members called for the government to emphasise the development of domestic production in a bid to minimise imported products and create more job opportunities for local people. Representatives from the Laos-China Cooperation Commission, Ministry of Foreign Affairs and Ministry of Industry and Commerce, and officials from the Chinese Embassy in Laos were also present at the signing ceremony.