Nagnobay Bank injects 470b kip to boost growth in deprived areas

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VietStock FI English - 37 month(s) ago 10 readings

Nagnobay Bank has announced it will issue low interest loans totalling 470 billion kip (US$5.8 million) this year to boost productivity in poor districts nationwide, as part of the government's policy to reduce poverty in remote areas.

The state-owned bank unveiled the loan package at its management board meeting held in Vientiane on November 1.

Nayobay Bank management board meets in Vientiane to discuss implementation of the government's policy to invest in poor districts.

The one-day meeting was chaired by the Governor of the Bank of the Lao PDR and Chairman of the Nagnobay Bank Management Board Mr Somphao Phaysith and attended by Nagnobay Bank managing directors and managers.

According to a report from the bank, the 470 billion kip loan will be disbursed to farmers and businesspeople in impoverished areas from January to September 2012. This will bring the total value of the bank's loans since 2007 to 1.54 trillion kip, which is about a 30 percent increase compared to the previous year.

The bank has earmarked 115 billion kip of the loan for crop cultivation, 114 billion kip for livestock operations, 5.2 billion kip for handicrafts, 57.1 billion kip for services, and 178 billion kip for businesses outside poor districts so they can purchase agricultural products from farmers in deprived areas, Nagnobay Bank reported.

About 220 billion kip is to be used for short-term investment, 100 billion kip will be given as medium-term investment loans, and the remaining amount will be used for long-term investment.

Over the first nine months of this year, the bank has been able to collect on borrowers' debts more easily and earlier than expected.

Nagnobay Bank was established in 2007 as part of government policy to reduce poverty in Laos. The bank has since received low interest loans worth 1.181 billion kip from the central bank.

The government believes the provision of investment capital for farmers and businesses in poor districts will boost productivity, create jobs and raise incomes so that local communities can escape from poverty.

The bank currently has seven branches and 46 service units operating in Luang Namtha, Oudomxay, Luang Prabang, Xieng Khuang, Savannakhet and Champassak provinces, and in Vientiane.

The bank's business strategy is to strengthen its ability to provide banking services to people in poor districts so they can access investment capital to boost productivity.

At present, about 27 percent of Lao people - or 19 percent of all Lao households - are classified as poor. The Party and government plan to reduce the poverty rate by half over the next five years.

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