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Bank opens SME service centre
Phongsavanh Bank on Tuesday launched a new product and service centre, SME Pro, to provide services to nine sectors of small and medium sized enterprises (SMEs) in Vientiane.
Phongsavanh Bank Managing Director Ms Sengdao Bouphakonekham uses a symbolic key to open the SME Pro centre.
The nine sectors include agricultural production; food processing; construction; retail and wholesale; auto repair; hotels, guesthouses and restaurants; transportation; education and business administration; handicrafts; and environmental protection.
“The services will initially be available only in Vientiane but will expand to all the bank's service units in the provinces soon,” bank Deputy Managing Director Mr Vanitja Sayasane said at the ceremony.
The bank expects to help with capacity building for existing local SMEs, support new business operators, and help SMEs integrate their businesses in overseas markets. The bank will provide consultation, loans and credit services.
The new unit has a budget of 900 billion kip available for loans to the SME sector over the next one to two years. It will require only three to five days to issue or offer a loan.
“So far we have issued loans worth 29 billion kip to 30 to 40 SME customers,” Mr Vanitja said.
The bank hopes to become the primary retail banking service provider for SMEs. Currently it has 150,000 account and loan customers, which includes both SMEs and large enterprises.
“With SME Pro's services, we expect to have an additional 50,000 customers within the next two years,” Mr Vanitja said.
The centre is basing its business model on the government's production and promotion policy and strategy plan for SMEs.
The sector is the foundation of the national economy and a backbone of economic growth, involving 99.8 percent of all businesses.
For this reason, the government has sought to encourage the growth of small and medium enterprises by improving the legal frameworks that regulate them.
Funding access has been made easier through the Lao Development Bank (LDB), which is one of many banks providing loans to SME.
The value of credit provided to SME rose from 7.3 percent of GDP in 2004 to 22.3 percent in 2009, Industry and Commerce Minister Dr Nam Vinhaket said at a recent meeting.
A report from the SME Promotion and Development Office classified small enterprises as those with an average number of employees not exceeding 19, total assets of 250 million kip or less, or an annual turnover of up to 400 million kip.
Medium enterprises are those with an average number of employees not exceeding 99, total assets of 1.2 billion kip or less, or an annual turnover not exceeding 1 billion kip.
“We are focused on promoting enterprises that do not have over 100 employees,” Mr Vanitja said.
Phongsavanh Bank – which began operations in March 2007 - is a private, licensed bank providing financial services to individuals, businesses, and government agencies.
vientiane times
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