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Laos to Step Up Financial Support for SMEs

Source: Xinhua News

The Lao government’s Small and Medium Enterprises (SMEs) Promotion Fund has injected 152 billion kip (some 7.3 million U.S. dollars) in financing for SMEs through commercial banks to mitigate the impact of the COVID-19 pandemic.

Agreements on the provision of financing in the form of long-term low-interest loans were signed on Friday between the SMEs Promotion Fund and six commercial banks. Witnessing the signing were Lao Minister of Industry and Commerce Malaythong Kommasith and over 130 representatives of relevant departments and organizations, according to Lao Economic Daily report on Tuesday.

Malaythong said the financing scheme is the government’s latest effort to address the current economic and financial issues, inflation, fluctuation of exchange rates, rising prices and soaring foreign debt.

“These soft loans are aimed at providing small businesses with more capital as the regular customers of banks, as well as enable them to expand their operations in agriculture so that more produce can be grown locally and less needs to be imported,” he said.

Besides, Laos has been concerned about a labor shortage that is affecting business operations despite the Lao government’s efforts to increase minimum wage for workers.

In addition, the Lao government has instructed relevant authorities to take urgent measures to address the continuing economic and financial difficulties with respect to inflation, unfavorable currency exchange rates, spiraling prices and foreign debt.