International Finance Cooperation (IFC), a member of the World Bank Group, has agreed to provide a long-term loan of US$8 million to ACLEDA Bank Lao Limited to help the bank expand its lending to micro, small, and medium sized enterprises.
The agreement in relation to the long term loan was reached yesterday in Vientiane, signed by the Managing Director and Chief Executive Officer of ACLEDA Bank Lao Limited Mr Narin Phon and the IFC’s Country Officer in Laos Mr Phonsavanh Phomkong.
The IFC helped Cambodia’s ACLEDA Bank PLC expand to the Lao People’s Democratic Republic by acquiring a 15.9 percent equity stake in its subsidiary ACLEDA Bank Lao Limited in 2009.
ACLEDA Bank currently has 34 offices across Lao PDR, serving more than 14,000 active borrowers, most of whom are small business owners. To date, IFC’s equity investment in ACLEDA Bank Lao Limited amounts to US$4.4 million.
“This latest loan from IFC will help us expand our credit programme to reach more small and medium borrowers around the country,” said Mr Narin Phon, managing director and chief executive officer of ACLEDA Bank Lao Limited.
“We have successfully established an extensive network of branches in the central and southern regions of Laos, and now we are aiming to extend our coverage in the northern areas, where small and medium enterprises still have limited access to financial services.”
The IFC has been a shareholder in ACLEDA Bank PLC since 2000 with a 12.25 percent stake. Earlier this year, the IFC entered into a partnership to provide a US$2 million loan to the bank to set up a new microfinance institution in Myanmar, which aims to provide loans to more than 200,000 people by 2020.
“By providing a long-term loan to ACLEDA Bank Lao Limited, small and medium enterprises in the country will have easier access to financial services, allowing them to expand their businesses, create jobs, and contribute to economic growth,” said Mr Phonsavanh.
Presiding over the signing ceremony was the Vice Governor of the Bank of Lao PDR Mr Sonexay Sithphaxay, representatives from both sides and other invited guests.
ACLEDA Bank PLC was established in 1993 in Cambodia as a national non-government organisation to develop credit and financial services for micro and small enterprises. It gradually became a microfinance institution and then a commercial bank. It is now the largest Cambodian bank by asset value.
The IFC is the largest global development institution focused exclusively on the private sector. We help developing countries achieve sustainable growth by financing investment, mobilising capital in international financial markets, and providing advisory services to businesses and governments.
In the 2012 financial year, the investments reached an all-time high of more than US$20 billion, leveraging the power of the private sector to create jobs, spark innovation, and tackle the world’s most pressing development challenges.
Source: Vientiane Times
June 21, 2013