AFC completed another project in Lao PDR successfully. This success was achieved during the Covid-19 crisis and augurs well for AFC underscoring the company’s commitment to professional work practices and agility to adapt in different challenging setting to deliver results.
AFC successfully completed the second phase of the Project “Lao Small and Medium Enterprise Access to Finance” funded by the World Bank and implemented by the Department of SME Promotion (DoSMEP) of the Ministry of Industry and Commerce (MoIC) in Laos PDR.
In Phase I, implemented between 2016 to 2018, the Project predominantly focused on selected capacity building measures targeting 4 Partner Financial Institutions – Lao China Bank, LaoViet, ST Bank as well as Sacom Bank - in the area of SME lending and credit risk management in addition to Lao Bankers' Association (LBA) staff resulting in 12 training interventions benefitting 178 participants. However, developing small & medium entreprise (SME) banking capacities required a wider and deeper engagement, in particular the development of a strategic SME business approach.
Phase II addressed this aspect working with three banks – Lao Development Bank, LaoViet Bank and Sacom Bank - to support them in learning and appreciate the importance of a strategic SME banking approach resulting in ”A Framework for SME Banking Strategy” for each bank.
The project was complemented by a national workshop on “A Strategic Approach to SME Banking” chaired by DoSMEP which was successfully completed with the participation of all key stakeholders. This workshop provided a platform for sharing the importance of SME banking strategy with a wider audience, sharing best practices and discuss challenges and solutions.
The process involved working through each bank institutional assessments ranging from the organization including vision and mission, key functional areas, products and processes, delivery channels and managerial responsibilities. Based on a SWOT analysis, a strategy framework was developed which should guide each bank to approach SME banking more strategically in line with international best practices and responding to the corresponding business opportunity.
Moving beyond, the scope of work and responding to the request of the DoSMEP and World Bank, the project team conducted a special ‘crisis management’ session for each bank on responses to the impact of COVID-19, and how banks should assess future risks and develop strategies. The team also provided insight and leads into a future potential area of support to the financial sector.