MANILA, PHILIPPINES - The Asian Development Bank (ADB) is providing fresh support to help the Lao People's Democratic Republic (PDR) build up small and medium-sized enterprises (SMEs) in a bid to broaden sources of growth in the national economy.
The ADB Board of Directors has approved grant and loan finance totaling $15 million for subprogram 1 of the Second Private Sector and Small and Medium-Sized Enterprises Development Program. It builds on an earlier ADB-funded initiative to boost the private sector and SMEs. A key feature of the program is a focus on gender mainstreaming to make it easier for women entrepreneurs to start small businesses.
The resources sector is the main contributor to the Lao PDR economy and expanding the private sector―which is dominated by SMEs―will help the national government achieve more balanced, inclusive growth. Under its current national development plan the government is targeting GDP growth of 8% a year and GDP per capita of at least $1,700 per year by 2015.
Subprogram 1 supports domestic policy reforms designed to improve the business environment for SMEs. These include the formulation of a new SME Development Plan for 2011-2015, the rollout of a web-based enterprise registry system, the startup of a regulatory review program, and several trade related initiatives.
"The rollout of the enterprise registry offices in the provinces is crucial to cut down the number of days and the cost for an enterprise to obtain approvals and start operations," said Sani Ismail, Financial Sector Specialist, in ADB's Southeast Asia Department. "We see the impact of this measure as especially beneficial for women as the lower business compliance cost will encourage more women entrepreneurs to register formally."
Mr. Ismail noted that by May 2011, more than half of newly registered enterprises are owned by women, compared to about 40% in 2008.