ADB Loan to Promote Women Entrepreneurs and Small-, Medium-Sized Enterprises in Lao PDR

MANILA, PHILIPPINES - The Asian Development Bank (ADB) will continue to support growing small- and medium-sized enterprises (SMEs) in Lao People’s Democratic Republic (Lao PDR) with a $15 million loan and another $4.378 in technical assistance (TA) designed to help promote and develop the private sector, including improving the registration of enterprises.

“Registration of enterprises is important not only to expand the number of SMEs in the formal sector but also to provide these SMEs with access to services and finance including bank loans,” said Sani Ismail, Financial Sector Economist in ADB’s Southeast Asia Department.

The loans build on subprogram 1 of the Second Private Sector and Small and Medium-Sized Enterprises Development program, which was implemented from 2009-2011 and focused on reforms to reduce the cost of doing business, national rollout of web-based enterprise registry system in provincial enterprise registry offices, and trade policy measures that directly benefit SMEs.

The second subprogram continues to target women entrepreneurs for assistance by consulting  women stakeholders  for policy decisions and by identifying specific constraints faced by women entrepreneurs to utilize trade preferences and to register their businesses.

By the end of 2012, more than 90,000 businesses had been registered, a dramatic increase over the 45,000 registered businesses in 2009. With this assistance, the Government will take further steps to improve the business climate through regulatory impact assessment and by facilitating SMEs to take advantage of preferential trade agreements, especially after Lao PDR’s accession to the World Trade Organization.

Government data suggests 99% of economic enterprises in Lao PDR are SMEs. The Government recognizes the importance of developing SMEs and has set targets of 13% annual growth in the SME subsector and 85% of workers in business engaged by SMEs by 2015 in its Seventh National Socio-Economic Development Plan.