Phongsavanh Bank Ltd, in partnership with the US Embassy to Laos, the US International Development Finance Corporation (DFC), and USAID, recently held a ceremony to formalize a loan portfolio guarantee agre ement. This agreement, jointly funded by USAID and DFC, will offer up to US$5 million in loan guarantees aimed at aiding farmers across Laos.

The signing ceremony featured Phongsavanh Bank’s Deputy Managing Director, Mr. Somboun Phongsavanh, and DFC’s Regional Managing Director for the Lower Mekong, Ms. Maria Goravanchi. The event was also attended by the Deputy Governor of the Bank of the Lao PDR, Mr. Soulivath Souvannachoumkham, and US Deputy Chief of Mission, Ms. Michelle Y. Outlaw, along with other notable guests including Vice Presidents of the Lao Front for National Development, Mr. Khamlay Sipaseuth and Dr. Od Phongsavanh.

This loan guarantee initiative aims to enhance access to credit for micro, small, and medium enterprises (MSMEs) in Laos’ agricultural sector. US Deputy Chief of Mission, Michelle Y. Outlaw, emphasized that the partnership not only supports individual businesses but also promotes a more inclusive and resilient economy. By working with local banks, the initiative will create sustainable opportunities for MSMEs to obtain financing, which will benefit both businesses and the overall economy.

Mr. Somboun Phongsavanh highlighted the vital role of public-private partnerships in fostering economic growth, expressing hope that this collaboration would inspire further initiatives that contribute to the development of Laos.

Phongsavanh Bank has been promoting financial access since 2017 through its Lao National Solidarity Fund, which operates in 44 villages across 29 districts in 11 provinces. Backed by government support, this initiative is set to expand throughout Laos. With the help of DFC, farmers are expected to see reduced production costs, higher profits, and improved financial stability. Additionally, village funds have set up learning centers to offer training in various agricultural practices, including crop farming, animal care, and fruit tree cultivation. These efforts aim to enhance agricultural output, improve food security, and boost the quality of products in Laos.

The credit guarantee agreement will further community development by offering financing that incorporates modern agricultural techniques and scientific knowledge, aiming to improve both the quantity and quality of agricultural produce to meet market needs, while providing value-added opportunities for local producers.

Phongsavanh Bank, established in 2007, is part of the Phongsavanh Group, a prominent Lao conglomerate engaged in various sectors, including banking, logistics, construction, insurance, trade, and the import/export of agricultural products.