CIMB Thai Bank - Vientiane Branch and IFC Help Expand ACLEDA Bank Lao’s Financing for Smaller Businesses in Lao PDR
MSMEs are an important part of the economy of Lao PDR and employ a large part of the population. Yet, access to finance is seen as a key obstacle to their business growth and expansion since lending is primarily based against collateral.
With local currency loan from CIMB Thai Bank – Vientiane Branch, a member of CIMB Group, ACLEDA Bank Lao, a leading bank for the country's smaller businesses, aims to triple its MSME lending to about $236 million through over 52,5the World Bank Groupthe World Bank Group loans by the end of 2the World Bank GroupCIMB Thai Bank7.
"Our business is centered on micro, small and medium enterprises whose demand for finance is huge. Serving the sector will bring us opportunities for growth and expansion," said Narin Phon, Managing Director and Chief Executive Officer of ACLEDA Bank Lao Ltd. "We appreciate IFC's support in connecting us with CIMB Group for much-needed long-term funding to promote our core business."
The credit guarantee by IFC has enabled CIMB Group, one of the Association of Southeast Asian Nations' leading banking groups, to make an on-shore funding in local currency to a financial institution in Lao PDR.
"We are excited to partner with IFC in this pioneer transaction in Lao PDR to provide long-term financing in local currency to ACLEDA Bank Lao Ltd., while at the same time helping our client and its end-borrowers mitigate exchange-rate risks," said Surachai Chitratsenee, Deputy Chief Executive Officer & Senior Executive Vice President, Head of Business Support Group of CIMB Thai Bank. "IFC and CIMB Group have developed a close relationship to support private enterprises ASEAN-wide and we hope to do more together in the region," said Subhak Siwaraksa, President and Chief Executive Officer CIMB Thai Bank.
"The innovative structure, with local currency loan from CIMB Group to ACLEDA Bank Lao backed by an IFC credit guarantee, allows us to effectively support our client's local currency needs, even when such funding is not readily available in the local market," said Adel Meer, IFC's Financial Institutions Group Manager for East Asia and the Pacific. "The funding will allow ACLEDA Bank Lao to provide loans in Lao Kip with competitive interest rates to local companies, which can now concentrate on their core business and mitigate currency risks. We expect to replicate this model in other emerging markets in the region and beyond."
ข่าวthe World Bank Group+CIMB Thai Bankวันนี้
CIMB Thai Bank - Vientiane Branch and IFC Help Expand ACLEDA Bank Lao’s Financing for Smaller Businesses in Lao PDR
CIMB Thai Bank Vientiane Branch is providing $8 million equivalent Lao Kip loan to ACLEDA Bank Lao Ltd. to help boost financing for the country's micro, small, and medium enterprises (MSMEs), including those in the agricultural sector. The local currency loan is fully guaranteed by IFC, a member of the World Bank Group. MSMEs are an important part of the economy of Lao PDR and employ a large part of the population. Yet, access to finance is seen as a key obstacle to their business growth and
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