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| BFL Deputy Managing Director Nicolas Pluchart (left) shakes hands with IFC Country Manager for the Lao PDR, Vietnam and Cambodia, Thomas J. Jacobs, following the signing of a financing agreement in Vientiane on Wednesday. |
New financing initiative targets SME growth, job creation
Small and medium-sized enterprises (SMEs) in Laos are set to gain greater access to financing following a new partnership between Banque Franco-Lao Ltd (BFL) and the International Finance Corporation (IFC), aimed at supporting business expansion, job creation, and private sector development.
The two institutions on Wednesday launched a US$10 million risk-sharing facility designed to help address one of the most significant challenges facing Lao businesses—limited access to credit.
SMEs account for 99 percent of registered businesses and provide 94 percent of formal employment in Laos. However, only 27 percent currently have access to bank financing, creating a major constraint on growth and investment.
Under the agreement, Banque Franco-Lao Ltd (BFL) and the International Finance Corporation (IFC) will each contribute up to US$5 million to share the credit risk on a US$10 million SME loan portfolio.
The arrangement is expected to enable the bank to expand lending to businesses that may otherwise struggle to secure formal financing while maintaining prudent risk management practices.
Speaking at the partnership signing ceremony in Vientiane, BFL Deputy Managing Director Nicolas Pluchart said expanding lending to SMEs is a top priority for the bank.
“Expanding our SME lending portfolio is a core strategic priority for BFL, but managing credit risks in a volatile market requires innovative financial tools,” he said.
Mr Pluchart noted that the facility would strengthen the bank’s ability to provide financing to entrepreneurs and businesses that contribute to economic activity, employment, and inclusive growth.
In addition to the financing facility, the International Finance Corporation (IFC) will provide technical assistance to strengthen the bank’s environmental and social risk management systems and support the development of SME-focused financial products for new market segments.
As part of the initiative, Banque Franco-Lao Ltd (BFL) aims to double its SME portfolio by 2028, helping businesses expand their operations and generate both direct and indirect employment opportunities.
IFC Country Manager for the Lao PDR, Vietnam and Cambodia, Thomas J. Jacobs, said strengthening the financial ecosystem is essential to unlocking the potential of the Lao private sector.
“Unlocking the potential of the Lao private sector requires a resilient and supportive financial ecosystem,” he said.
Mr Jacobs added that the partnership combines capital support with technical expertise, enabling a leading local bank to safely extend financing to underserved businesses while strengthening market resilience and promoting sustainable employment.
The transaction is being implemented under the International Finance Corporation’s Small Loan Guarantee Programme, which benefits from a pooled first-loss guarantee provided by the International Development Association’s Private Sector Window Blended Finance Facility.
This arrangement is intended to help de-risk lending and expand financing for small businesses in fragile and low-income markets.
The partnership reflects the shared commitment of both institutions to strengthening the Lao private sector and supporting sustainable and inclusive economic growth in Laos.
By Times Reporters
(Latest Update June 18, 2026)
