Improving MSME
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On the morning of Tuesday, 30 June 2026, at the Head Office of Banque Pour Le Commerce Exterieur Lao Public (BCEL), a kick-off meeting was held to officially launch the Credit Guarantee Scheme following the execution and registration of the Credit Guarantee Agreement between the two parties.
On the morning of Thursday, 25 June 2026, Agricultural Promotion Bank (APB) hosted the official Kick-Off Meeting for the Credit Guarantee Scheme at its Head Office, following the successful execution and registration of the Credit Guarantee Agreement between Lao Credit Guarantee Sole Co., Ltd. (LCGC) and APB.
On 19 June 2026, at 10:00 a.m., a seminar on the credit guarantee services was held at the Head Office of the Agricultural Promotion Bank Ltd. The seminar was co-chaired by Mr. Nouxay Phoumsouvan, Deputy Director of Agricultural Promotion Bank Ltd., and Mr. K.L. Wong, Chief Executive Officer of Lao Credit Guarantee Sole Co., Ltd. A total of 25 participants attended the event.
FAQ
MICRO, SMALL & MEDIUM-SIZED ENTERPRISE FINANCING GUARANTEE SCHEME (MFGS) FAQ’s
FREQUENTLY ASKED QUESTIONS
What is a Credit Guarantee?
The Credit Guarantee is a financial tool that is provided to the Banks as a collateral to support their loans to MSMEs. It reduces the Bank’s risk when lending to MSMEs. The credit guarantee is a promissory note given by the Guarantor to repay part of the loan if the borrower fails to pay the loan.
Which countries use the Credit Guarantee to support financing to MSMEs?
More than 100 countries have the credit guarantee mechanism to improve MSME access to finance eg. Countries in ASEAN, Asia, Africa, Europe and Americas |
What are the benefits of the Credit Guarantee to the Banks?
- It is a Risk-Sharing tool to limit risk exposure of lending to MSMEs
- It enables Banks to lend higher loan amounts even when borrowers are unable to provide additional collateral
- The Bank is able to broaden its customer base with MSMEs as new customer segments
- Loans that are guaranteed by the Credit Guarantee has a lower capital requirement ie. Lower Capital Adequacy Ratio (CAR)
(LCGC has written to the Bank of Lao to obtain approval for granting capital relief to Banks for loans guaranteed by LCGC)
- Loans that are guaranteed by the credit guarantee requires lower loan provisioning under IFRS 9 which will enable the Bank to record higher profits
What type of loans can be guaranteed by LCGC credit guarantee?
Business Loans offered to MSMEs
- Term Loans
- Overdraft
- Revolving Facilities eg. Trade Facilities, Invoice Financing, Receivables Financing
