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(KPL) The Bank of Lao PDR (BOL), in cooperation with the International Finance Corporation (IFC) and British Embassy in Vientiane, organized a seminar under the theme “Credit-reporting system” to promote the development of a standardized credit-reporting system in the country.
Participants of the conference on Credit Reporting System
(KPL) The Bank of Lao PDR (BOL), in cooperation with the International Finance Corporation (IFC) and British Embassy in Vientiane, organized a seminar under the theme “Credit-reporting system” to promote the development of a standardized credit-reporting system in the country.
The seminar was held in Vientiane on Jan 12. Around 100 representatives including government officials and managers of local financial institutions attended and international symposium on credit reporting in Vientiane.
The event brought together for the first time, the National Bank of Cambodia, the Monetary Authority of Singapore, and 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.
This is part of a wider effort to improve the country’s financial infrastructure, facilitate lending for smaller businesses and boost economic growth.
“A credit-information bureau performs 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 Deputy Governor, Bank of the Lao PDR Vattana Dalaloy.
“Our partnership with IFC will help us bring Lao PDR’s credit-reporting infrastructure in line with international standards, enabling businesses to obtain the financing needed to grow and contribute to the economy,” said Mrs Vattana.
Access to finance is a major obstacle to doing business in Lao PDR. Only 12 per cent of micro, small and medium enterprises have access to formal credit and almost half of those in need of financing are un-served or under-served.
By allowing individuals and companies to 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 are essential for creating a healthy financial sector and facilitating greater access to finance for smaller business,” said Head of IFC’s office in Vientiane Phongsavanh Phomkong.
“They are also effective tools for financial institutions to manage credit risks, expand lending operations, and foster financial inclusion,” said Mr Phongsavanh.
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, the Philippines, the Pacific Islands and Vietnam.
KPL
