Nayoby bank will increase the maximum loan amount it releases to a customer from the current 30 million kip to 50 million kip next year and expand its service coverage in a move to enable more farmers to access finances for their production needs, a bank governor has said.
Governor of the Bank of the Lao PDR, Dr Somphao Phaysith revealed the plan recently when he addressed the National Assembly (NA)’s ordinary session.
We will increase the credit budget for the bank [Nayoby bank]. We plan to announce the new policy by the end of this year, he told the session.
The state-own Nayoby [policy] bank, whose policy is to particularly release loans for poverty-fighting schemes, will also expand its loan service coverage along with considering lower interest rates for loans, Dr Somphao said.
We will study lowering our interest rates appropriately, he said.
The planned improvement of the bank’s policy including its plan to expand service coverage will be made in line with the Party and government’s policy that intensifies efforts to alleviate poverty, the bank governor told the NA.
To expand its loan service coverage to reach local people in remote communities, the bank – which now has 10 branches and 71 service units – will inaugurate a pilot scheme by integrating its loan services with some village funds.
Dr Somphao admitted that commercial banks in Laos have been unable to expand their branches and service units to all communities across the country.
The bank governor responded to a question raised by members of the parliament asking about the loan policy of the Nayoby bank after learning there have been irregularities in the loan approval process.
Dr Somphao admitted that there were 17 irregular cases over the past few years but all those cases have been addressed and those officials involved have been disciplined.
The cases included some where individuals who collected the names of local people and claimed they were representing the people in applying for loans from the Nayoby bank, for which the bank released the loans.
The bank’s officials thought they [the individuals] were truly representing the people and released the loans, he said.
In this regard, once the loans were disbursed and the bank’s officials came to collect the money back, they found that the people did not know and did not receive any loans.
In addition, there were cases in which borrowers (people) paid back the loans but the bank’s officials did not hand out the money to the bank.
Source: Vientiane Times