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Vientiane, Lao PDR, January 12, 2017
—IFC, a member of the World Bank Group, is working with Bank of the Lao PDR (BOL) to reform its credit-reporting framework. This is part of a wider effort to improve the country’s financial infrastructure, facilitate lending for smaller businesses, and boost economic growth.
Around 100 representatives—including government officials and managers of local financial institutions—attended an international symposium on credit reporting in Vientiane today. Funded by Canada, Japan, Switzerland and the British Embassy in Vientiane, the event brought together for the first time, the National Bank of Cambodia, the Monetary Authority of Singapore, Bank of Thailand, and credit-bureau companies from countries in the region to raise awareness of the importance of credit reporting. Participating agencies shared various models of credit-reporting systems in the region. This will help BOL’s efforts to upgrade the country’s credit-information bureau, a central platform that collates credit information of borrowers.
“A credit-information bureau can perform the crucial function of gathering and distributing reliable credit information, improving creditor protection, enhancing competition in the credit market, and ultimately increasing access to credit,” said Vattana Dalaloy, Deputy Governor, Bank of the Lao PDR. “Our partnership with IFC will help us bring Lao PDR’s credit-reporting infrastructure in line with international standards, enabling businesses obtain the financing they need to grow and contribute to the economy.”
Access to finance is a major obstacle to doing business in Lao PDR. Only 12 percent of micro, small, and medium enterprises have access to formal credit, and almost half of those in need of financing are unserved or underserved. By allowing individuals and companies build positive credit histories, a well-functioning credit-reporting system will help banks and microfinance institutions better manage credit risks, thus reducing lending costs and collateral requirements.
“Credit-reporting systems are a critical element of a country’s financial infrastructure and essential for creating a healthy financial sector and facilitating greater access to finance for smaller businesses,” said Phongsavanh Phomkong, Head of IFC’s office in Vientiane. “They are also effective tools for financial institutions to manage credit risks, expand lending operations, and foster financial inclusion.”
This symposium is part of an ongoing IFC advisory project funded by
Canada, Japan, and
Switzerland to support the development of a standardized credit-reporting system in Lao PDR. IFC is a leader among the international financial institutions working in the area of credit-reporting reforms worldwide. In East Asia and the Pacific, IFC has supported improvements in credit-reporting systems in several countries, including China, Cambodia, Indonesia, Papua New Guinea, Philippines, the Pacific Islands, and Vietnam.
About IFC
IFC, a member of the World Bank Group, is the largest global development institution focused on the private sector in emerging markets. Working with 2,000 businesses worldwide, we use our six decades of experience to create opportunity where it’s needed most. In FY16, our long-term investments in developing countries rose to nearly $19 billion, leveraging our capital, expertise and influence to help the private sector end extreme poverty and boost shared prosperity. For more information, visit
www.ifc.org
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