China-funded bank solves financing problems as part of B&R Initiative

VIENTIANE — The LaosChina Bank is helping to solve financing problems for small and medium-sized enterprises, or SMEs, in Laos as part of the Belt and Road Initiative.

The lender was established in 2014 as a joint venture between Fudian Bank of China’s Yunnan and Banque Pour Le Commerce Exterieur Lao or BCEL.

In terms of banking services, for large-scale projects funded by China in Laos, the LCNB has launched “supply chain financing products”.

“For SME projects of the World Bank in Laos, the LCNB has also launched a special loan service,” said Deng Yu, managing director of LCNB.

Despite the presence of more than 40 commercial banks in Laos, their products and services are basic.

Most of the capital is poured into big enterprises, leaving a “hole” when it comes to SME financial services, which is now being filled by the LCNB.

According to statistics by the Lao Ministry of Planning and Investment, China helped fund 764 projects in Laos last year, covering various fields including mining, agriculture, energy, handicrafts and tourism.

Up to 552 are 100 percent “The construction of underfunded by China while 212 are ground infrastructure will be China-Laos joint ventures. one of the bright spots,” he China is the biggest foreign said. investor in the country.

A disaster protection sysIt had been reported that tem, water supplies, elecsuppliers and subcontractricity cables and gas pipes tors involved in China’s will be built under the surinvestment projects there face along with a high-speed could not get credit support In addition, LCNB has also rail network and city traffic from large banks. helped THIVA Co, which lanes. LCNB subsequently promakes traditional Lao

“On the surface we will have vided a variety of financial clothes, shawls and other green areas and sidewalks,” services to enterprises which silk products, to obtain fundsaid Xu. ing.solvedtheproblem.

Construction should focus For the construction of the s of December, 2016, the on a more efficient transport Saysettha Comprehensive bank had approved nine network, environmental proDevelopment Zone in Vienloans for SMEs with a total tection, urban and rural intetiane, a loan from LCNB for amount of more than 11 bilgration, and innovative urban LJ Construction Co in Laos lion Lao kip ($1.35 million). planning. helped the contractor comThe loans involved busi

“Industry in the economic plete work on roads, water nesses in the sectors of trade, zone should develop high-end supply and drainage sysconstruction and handimanufacturing, featuring tems before the rainy season crafts, and has provided integrated production servistarted. strong support for their ces,” said Huang Qunhui, At the same time, the development. director of the Institute of LCNB has also actively parUnder the guidance of the Industrial Economics under ticipated in the World Bank’s Belt and Road Initiative, the the Chinese Academy of financing projects on proLCNB has taken a strategy to Social Sciences. moting the development of help local SMEs solve their

Located about 100 kilomeSMEs in Laos. financing difficulties, ters southwest of downtown In August, 2014, the World becoming a solid bridge for Beijing, Xiongan New Area Bank and the Lao governeconomic and trade will cover the three existing ment signed an agreement exchanges between China counties of Xiongxian, Rongon supporting financing for and Laos. cheng and Anxin in Hebei SMEs in Laos. province. This helped to provide $20 million of preferential loans for Lao banks and provide long-term financing services through commercial lenders to qualified SMEs in the country.

Since then, LCNB has become an agent bank of the project and has overseen an SME loan for Lao MKE Electronics Co, which solved the company’s capital shortage situation.

Lao MKE is an agent of the Chinese mobile phone maker, Huawei Technologies Co Ltd, in Laos and became the first SME to obtain a loan from the bank.

For SME projects of the World Bank in Laos, the LCNB has also launched a special loan service.”

managing director of LCNB

Deng Yu,

number of projects that China helped fund in 2016