Financing your business

         Entrepreneur needs certain fund to invest on a business. Apart from one own saving, he/she may seek fund from informal sources such as commercial banks, SME credit scheme; and from informal sources .

Commercial banks

        There are approximately eight commercial banks operate in Lao PDR. However, fund provision for SME is not always accessible, and limited to very few who met the banks' collaterals requirement. Click here for list of commercial banks in Lao PDR.

SME scheme and microfinance      

SME sector has been increasingly recognised as having important role in economic development of Lao PDR. Nevertheless, supporting fund to SME is relatively limited. The microfinance committee has been established to work on this. The members of the committee are representatives from different concerned ministries and the chairperson is from the Central bank of Lao PDR. Recently, there is also a study on SME fund which is to support one of SME development and promotion policies (No. 42/PM). This report contains an annex with some 50 microcredit schemes currently in operation in Lao PDR.

Other financing sources

        In addition to informal source of finance, entrepreneur can seek fund through informal source such as informal money lenders, village saving groups, Huay group, etc. These informal sources have fewer requirements than formal but interest rate is high, could be up to 30% per month.