However, there is a growing likelihood of a default on the government’s massive debt. Over-investment in the energy sector, coupled with an ambitious infrastructure plan funded by Chinese loans, has turned Laos into one of Asia’s biggest borrowers. Notably, China lent 70% of the $6 billion needed for the high-speed rail link between Vientiane and Kunming.

In 2024, public debt stood at 97% of GDP. As per the International Monetary Fund (IMF), the ratio will rise to 127% by 2029, leaving Laos in “external and overall debt distress.” While taking note of the government carrying out course-correction measures like currency stabilisation, raising money through domestic borrowing and asset sales, and charging higher taxes, Sydney-based think tank Lowy Institute suggests that Laos go for debt relief, either by China (which it says is unlikely), or with multilateral IMF-led restructuring.

The debt trap

While most economists are discussing the Lao government’s challenge of reducing the risk of a debt default risk, three members of the Lowy Institute, Keith Barney, Roland Rajah, and Mariza Cooray, in their study titled “Trapped in debt: China’s role in Laos’ economic crisis,” have put a sharp focus on China’s role in propelling the Southeast Asian country’s economic doldrums.

The analysis showed that Laos cannot escape the crisis without substantial debt relief. While growing out of the crisis is unrealistic, even with the benefit of the Laos-China Railway or realistic reforms to boost growth and government revenue, the nation also has little to no room to absorb any future shocks without suffering an even deeper crisis. Whether under a China-led bilateral deal or a multilateral IMF-led restructuring, Laos’ need for debt relief is clear.

The Lao Kip (the national currency) has lost half its value against the US dollar since the start of 2022, causing domestic prices to skyrocket and devastating household incomes. It has resulted in food insecurity and transnational labour migration. Total public and publicly guaranteed (PPG) debt is estimated to exceed 100% of GDP. Laos has not formally defaulted on its international debt obligations, but only due to repeated ad hoc debt deferrals from China, which holds nearly half of Laos’ sovereign external debt.

Laos’ sovereign debt crisis dates back to the early 2000s, when public debt exceeded 140% of GDP. Laos chose not to participate in the World Bank–IMF Heavily Indebted Poor Countries Initiative. Instead, Russia, Laos’ largest creditor at the time, wrote down 70% of the face value of their bilateral debt and restructured the rest on highly concessional terms.

Laos made a strong recovery, with annual economic growth accelerating to around 7%. The economy was liberalised, facilitating investment inflows, and the country benefited from rising global mineral prices. Throughout the 2000s, Laos steadily integrated into the Western-led international financial and development architecture, and it secured substantial Japanese aid, apart from being able to borrow on highly concessional terms from Multilateral Development Banks (MDBs).

However, things changed after 2010, as Laos changed course and became one of the heaviest borrowers (relative to GDP) under China’s Belt and Road Initiative (BRI), formally launched in 2013. While from Beijing’s part, it was a pure geopolitical move, the Southeast Asian country fell for it. In 2016, Laos became host to a signature BRI project, the Laos-China Railway, an immense $6 billion engineering initiative to connect the Lao capital Vientiane to China’s Yunnan province.

The project’s enormous cost, in relation to the small Lao economy, garnered significant international attention. Additionally, billions were invested in hydropower and transmission projects, which were loosely aligned with the government’s slogan of becoming the “Battery of Southeast Asia.” However, this initiative was experiencing declining state revenues and an increase in borrowing from international capital markets.

Alongside its borrowing, the government ran increasingly profligate fiscal policies. Although Laos has persistently run large budget deficits, things widened substantially to reach 5% of GDP by the mid-2010s.

Also, government revenue sharply declined, falling from 20% of GDP in 2013 to 15.4% by 2019, reflecting investment incentives, tax exemptions, and weak compliance. This saw the government increasingly borrow from international bondholders and commercial banks, adding a further $2.1 billion of debt by the end of 2019.

The government took on large debts for resource and infrastructure projects with long and uncertain lead times, simultaneously allowing revenues to fall and the fiscal position to weaken. Heavy borrowing from China and commercial sources delivered a remarkable reversal in the structure of Laos’ public debt.

In 2004, three-quarters of Laos’ debt was on highly concessional terms, with only one-quarter non-concessional. By 2019, things got complicated further due to higher interest rates, shorter repayment periods, with the expiry of grace periods on large Chinese loans producing a dramatic rise in debt servicing costs. Including amounts ultimately deferred by China, scheduled debt service payments increased threefold, from less than $375 million in 2016 to $1.2 billion in 2020 and $1.7 billion by 2023.

Currency collapse

While the Kip faced sharp depreciation due to pre-existing vulnerabilities and global economic shocks like the COVID-19 pandemic and the Ukraine war, China’s role was equally important. Beijing provided substantial financial assistance through the deferral of impending debt service payments (thus far $2.5 billion in total) along with the extension since 2020 of a RMB 6 billion ($900 million) currency swap line from the People’s Bank of China (PBoC).

“Without these supports, Laos’ economic crisis would have been far deeper. Laos chose not to participate in the G20 Debt Service Suspension Initiative that provided temporary debt service relief to the world’s poorest countries during 2020 and 2021. The duration of China’s debt deferrals to Laos has been considerably longer than the G20’s initiative, thus far extending into 2024. However, a lack of transparency — around the continuation and terms of debt deferrals, whether the PBoC swap line can be used for balance of payments purposes (i.e. to defend the kip), and when it will be concluded — has fed uncertainty, exacerbating Laos’ crisis,” remarked Barney, Rajah and Cooray.

Laos entered the ongoing decade with substantial and mounting macroeconomic vulnerabilities. Even in the absence of global shocks, Laos would likely have faced significant difficulties in meeting its impending debt service requirements, most of which were owed to China.

Based on pre-COVID economic projections by the IMF, debt service payments would still have reached more than a third of government revenue — around 2.5 times the IMF warning threshold of 14%. Foreign exchange reserves held at the Bank of the Lao PDR were also inadequate. At the end of 2019, reserves stood at just under $1 billion, equivalent to 1.4 months of imports — half the three-month international benchmark level and low compared to other developing countries that have subsequently experienced severe debt problems.

Mounting debt servicing pressures, combined with global economic shocks, saw Laos experience sharp net financial outflows. While all developing countries faced financial pressures due to capital outflows, sharp increases in US interest rates, and an appreciating dollar, Laos faced the worst of it. In 2020, it was downgraded by global credit rating agencies, followed by a similar move from the Thai credit rating agency in 2023.

The last move resulted in Laos losing a major part of its access to the Thai bond market, leaving it unable to access fresh foreign currency financing to service its debts. Ballooning debt service payments and persistent unrecorded capital outflows combined to see around $700 million annually in net financial outflows, leaving the Lao Kip further vulnerable. With net exports and foreign investment inflows also drying up in 2022 due to the Ukraine war, the currency duly collapsed.

Is Laos a victim of debt traps?

There is an accusation that China purposely over-lends to developing countries to create a debt crisis to leverage political and economic concessions. In Laos’ case, heavy Chinese lending into the Lao energy sector resulted in massive overcapacity, financial losses, and finally the takeover of its energy grid by a Chinese state firm.

The Southeast Asian country’s domestic elite also appears to be an equal participant in the poor decisions that ultimately led to the mishap. They approved the infrastructural projects undertaken with Chinese loans, and they made matters substantially worse by overseeing a sharp decline in government revenue collection, relying on fickle international sovereign bond investors to plug the gap.

During most of the time covered by China’s lending spree, Laos lacked an international credit rating. Lao agencies negotiated energy deals from a stance of sovereign agency and considerable ambition, but also a relatively subordinate position characterised by institutional weakness.

China’s policy banks should have recognised that their planned lending scale would create significant risks of debt distress, especially as the grace periods on their loans expired and scheduled debt service payments increased. However, the Lao government exacerbated the situation by allowing revenues to decline sharply, leading to increased short-term external borrowing and a diminished capacity to service its debts. The consistently low foreign exchange reserves should have served as a clear warning that the ability to safely take on additional foreign currency debt was limited, not expansive.

However, China also knows that Laos warrants debt relief. In 2019, China’s Ministry of Finance released its own BRI debt sustainability framework (BRI-DSF), designed to guide its approach. The BRI-DSF closely follows that of the IMF, utilising the same key thresholds to signal when debt is problematic.

The Lao government has imposed foreign exchange controls and tightened monetary policy to stabilise its currency. Unable to raise fresh foreign capital to help meet impending debt service payments, the government has resorted to borrowing domestically, selling state assets, increasing tax revenues, and imposing harsh budget cuts.

In the medium term, the hope is that Laos will grow out of debt, especially given the recent completion of the Laos-China Railway. However, the most important measure, by far, keeping Laos afloat is the continued ad hoc deferral of near-term debt service payments to China.

Still, as per the IMF, apart from debt problems, Laos will see continued Kip depreciation, double-digit inflation eroding household incomes, rising outmigration to Thailand resulting in domestic labour shortages, and greatly reduced public and private investment, with the latter crowded out by heavy domestic borrowing by the government to meet its financing needs.

For Barney, Rajah and Cooray, even under the most optimistic economic assumptions, it would not be possible for Laos to restore public debt sustainability. For instance, a return to 7% annual economic growth would be in line with Laos’ pre-COVID historical growth and consistent with studies by the World Bank conducted in 2018 extolling the large potential benefits of the Laos-China Railway, assuming these are complemented by trade reforms and improvements in other forms of transport connectivity.

The Southeast Asian country might also optimistically lift revenue back to 20% of GDP by 2029, compared to its current 16%, with the additional revenue split equally between achieving a larger budget surplus and restoring core spending. Experts assume annual currency depreciation and inflation will slow to 5% from the current double-digit rates, while the government can borrow externally and domestically on similar terms to the past.

Yet even the above-mentioned assumptions would not be enough to put Laos on a path to exiting the crisis. Without additional and sustained Chinese debt deferrals, impending debt service payments would remain at highly problematic levels under any scenario, and above the IMF warning threshold until the early 2030s. The overall stock of debt would also remain at unsustainable levels at 60-80% of GDP. In present value terms — which adjust for the fact that much of Laos’ debt is concessional — debt would be above the IMF warning threshold into the 2030s.

To help Laos exit its debt crisis, the IMF may require a debt restructuring currently involving its financial support. According to the latest IMF guidance, such restructurings should aim to restore sustainability within five years such that key debt indicators are below their respective IMF warning thresholds.

“A full debt restructuring scenario is beyond the scope of this paper. However, we construct an illustrative scenario to give a sense of the scale of debt relief required. We suppose that a comprehensive debt restructuring programme, including complementary economic reforms, allows annual growth to remain at 4% per year, with currency depreciation and inflation stabilising at 5%, and revenue rising to 18% of GDP by 2029. Revenue gains are assumed to be split evenly between higher government spending and a larger fiscal surplus, which rises to 4% of GDP. As before, we focus on two key debt indicators, the ratio of external debt service to state revenue and the present value of external public debt relative to GDP,” Barney, Rajah and Cooray commented.

Based on the above prediction, restoring debt sustainability in Laos would require a sharp reduction in external debt service payments, equivalent to over 60% of average payments over the rest of this decade. Also, at least a one-third reduction in the present value of external public debt is required, excluding debt owed to MDBs, as this is typically only included as part of multilateral debt relief initiatives. This should be considered a minimum degree of debt relief, since it assumes no buffer to absorb further shocks.

“In Laos’ case, restoring sustainability would require a comprehensive approach. Relying solely on rescheduling would require China to extend the maturity on its Ex-Im Bank loans by 40–50 years and more than 100 years for CDB loans. This is unlikely. Alternatively, a combination of sharply reduced interest charges to 1% (Ex-Im) and 1.5% (CDB), 15-year extensions of maturity, and new five-year grace periods for both Ex-Im and CDB loans would be within the upper bounds of what China has provided in other cases and achieve the required degree of debt relief,” Barney, Rajah and Cooray concluded.

The post Is Laos falling into China’s debt trap? appeared first on International Finance.

Over the past two decades, LDB has played a leading role in implementing state economic policies and supporting national development, while strictly adhering to domestic and international banking regulations.

Industry observers note that LDB is “one of the most outstanding financial institutions to watch” in the region. Its strategy has combined sound financial performance with modernisation initiatives, earning accolades as a fast-growing bank with innovative employee- and customer-focused programmes.

Expanding electronic payment networks

LDB’s roots lie in a government-led restructuring of Laos’ fragmented banking sector. In 2003, the Lao government merged two troubled state banks, Lane Xang Bank and Lao Mai Bank, into the new Lao Development Bank. The merger aimed to revitalise financial stability by consolidating capital, eliminating overlapping structures, and rebuilding public confidence in banking.

The newly formed LDB inherited a nationwide network and the mandate to support national socioeconomic development. In its early years, the bank focused on strengthening its balance sheet and human resources, recruiting competent personnel to meet its redefined mission.

Throughout the 2000s, LDB systematically upgraded its systems and services. Notably, it migrated to a modern core-banking platform (“T24”) by 2010, connecting all branches online and enabling real-time inter-branch operations. It also introduced new customer products: ATM and electronic POS networks, and as a pioneer among Lao banks, a mobile banking service (marketed as “LDB Trust”) fully integrated into electronic payments.

By integrating ATM transactions into mobile/ e-commerce channels, LDB laid the groundwork for Lao consumers to conduct electronic payments nationwide. The bank concurrently expanded its credit portfolio to support small and medium enterprises (SMEs) in agriculture and rural development, aligning its loans with the goal of job creation and poverty reduction. These early reforms set the stage for LDB’s future growth, building capacity and technological capability within the organisation.

Data-driven transformation for growth

Having experienced the global COVID-19 shock and a broader government push to reform state-owned enterprises, LDB embarked on a major privatisation in 2021. This restructuring aligned with national policy to turn specialised state banks into more competitive joint enterprises.

Under the new ownership, LDB overhauled its corporate governance and leadership. A new Board of Directors was appointed, supported by governance committees meeting international “three lines of defence” standards.

Sitthisone Thepphasy was named Board Chairman, bringing a vision-focused leadership style praised for disciplined oversight and ethical rigour. The management adopted a unifying slogan: “Change for the Target to Success,” emphasising strategic focus and streamlined processes under the refreshed organisational structure.

LDB’s mission and vision were recalibrated to be more customer-centric: its official vision now is “to be the bank that customers can trust for getting the best services, the best technology, and the best staff responses.”

In practice, the executive team, led by President Chanthanome Phommany, pursued a data-driven transformation. They conducted granular financial analysis to identify underutilised capital, optimise branch performance, and restructure costs. This led to clear strategic plans and improved employee development programmes, reinforcing professionalism across the bank. Management reports that in the first year of the new regime, LDB significantly outperformed peers in profit growth and asset expansion.

Expanded physical presence nationwide

With visionary leadership, LDB substantially grew its physical and service footprint. LDB operates over 18 branches, supported by 75 service units, 263 ATMs, and eight foreign-currency exchange offices nationwide. These units extend banking access even to remote districts. With expanded staffing and training programmes, LDB emphasises a professional workforce that can support its complex product range.

In an exclusive interview with International Finance, LDB Managing Director Fongsamout Douangchai, said, “Our product lineup is broadened. The bank now offers a full spectrum of commercial banking services: household and corporate deposits, term loans (including mortgage and auto loans), trade finance, and international remittances. In particular, we have issued UnionPay and Visa debit/credit cards, enabling customers to transact at home and abroad with global networks. It provides SWIFT-based international transfers and partners with Western Union for rapid remittances.”

“The bank introduced LDB Biz, an online banking platform for businesses (including payroll services), so corporates can manage accounts and salaries without visiting branches. We also installed extensive payment infrastructure: over 260 ATMs, plus electronic point-of-sale (POS) terminals and QR-code readers, to facilitate digital payments countrywide. In sum, our expanded branch network and service portfolio now cover all major banking needs of Lao businesses and citizens,” he added.

Building on these foundations, LDB has invested heavily in digital transformation. Its flagship LDB Trust mobile app has been positioned as a game-changer in Lao banking. The app functions as both an electronic wallet and a full-service bank portal. Users can transfer funds, pay utility bills (electricity, water, loans), top up phone accounts, and receive real-time account statements.

Unique features include integrated market data: customers can view Lao gold prices, Bitcoin values, foreign exchange rates, and interest rates on the go. By year-end 2022, over 50,000 merchants were registered on the platform, reflecting its adoption in retail commerce. LDB reports that usage of LDB Trust has surged after recent app improvements and customer incentive campaigns.

Alongside LDB Trust, LDB Biz was launched as a 24/7 web and mobile banking portal for corporate clients. Through LDB Biz, companies and organisations can initiate transfers and view statements.

LDB has also integrated its card services and mobile app: customers can link their UnionPay cards to LDB Trust for ATM withdrawals. These digital platforms support the bank’s customer-centric strategy. For example, LDB Trust includes e-commerce integration: it was among the first to tie ATM/mobile banking into online shopping. Users can make QR-code payments at merchants directly from the app and even promote their own business offers through in-app merchant portals.

The app’s design emphasises simplicity (one-click transfers, easy billers), so that even first-time users can transact confidently. As a result of these efforts, LDB Trust and LDB Biz have “performed soundly” as channels for transfers, bills, top-ups, and other services, greatly increasing convenience for Lao customers.

Another notable alliance is in the gold investment space. LDB has teamed with KPV Group (a leading Lao gold merchant) to integrate gold savings into digital channels. An “Easy Gold” joint venture arrangement enables KPV’s retail customers to use the LDB Trust app for gold purchases and instant settlement. For example, gold orders on the Easy Gold platform can be paid directly from an LDB account via the app. By embedding gold trading into LDB’s mobile wallet, the bank taps into both household savings and wealth-tech opportunities. While official details are sparse, this initiative illustrates LDB’s strategy of leveraging private sector partnerships (KPV Group, RMA, etc.) to extend its services and market presence.

Building strategic collaborations across diverse sectors

To broaden its reach and product capabilities, LDB has equipped itself by cooperating with resilient commercial banks in neighbouring countries such as Thailand, Vietnam and China. Acceleration initiated the development of LDB’s enabler to enhance its foreign trade facilitation capacity.

Commitment to sustainable development goals

Sharing his views about LDB implementing the ESG principles, MD Douangchai said, “We have woven environmental, social, and governance (ESG) principles into its business strategy. The bank explicitly supports Laos’s sustainable development agenda. Management emphasises financing clean hydropower export, eco-tourism, and modernised agriculture as part of the post-COVID economic recovery. In practice, our bank evaluates lending and investment projects against their ecological impact, and it offers tailored loans for green initiatives such as agroforestry or rural electrification.”

A pioneering aspect of LDB’s ESG push is its involvement in Laos’s nascent carbon market. The bank has facilitated carbon credit projects through a Lao firm, CS Carbon Company, which holds forestry concessions. Under the new national carbon credit decree, these projects cover an area of roughly 2.5 million hectares of forest land.

LDB has provided advisory and financial support to CS Carbon’s schemes, making it effectively the first Lao bank to back certified emission reduction initiatives. By integrating carbon credits into its portfolio, for example, enabling businesses to buy or earn Lao Carbon Units, LDB positions itself at the forefront of financing nature-based solutions. This aligns with the bank’s broader climate commitment and the country’s goal to tap international carbon funds.

“On the social side of ESG, we have adopted internal governance frameworks and staff welfare programmes consistent with international norms. The bank implements strict anti-money laundering (AML) and know-your-customer (KYC) systems as noted in internal reports, and has won awards for its employee welfare initiatives,” Douangchai added.

The board’s three lines of defence model and emphasis on professional ethics reflect an institutional commitment to good governance. These ESG efforts are now integrated into LDB’s brand and risk management outlook, reinforcing confidence among socially conscious investors and clients.

Multilingual digital solutions

LDB’s transformation has been communicated via high-profile marketing campaigns and user-focused technology. The bank deliberately adopted celebrity endorsements to raise brand awareness. For example, its LDB Trust app promotion in 2023 featured Thai television star Nine Naphat as the brand ambassador, tapping into his youthful fanbase.

Local influencer Bella Lani was likewise engaged to reach millennial customers. These campaigns portrayed LDB Trust not just as a banking tool but as a modern lifestyle app, strengthening public trust and driving downloads. According to LDB’s management, the app saw “significant growth” after such promotions.

Technologically, LDB is integrating marketing and service channels. Its digital platforms now include targeted promotions and easy enrolment for customers: for instance, new app users receive welcome incentives and merchant coupons.

Douangchai also heaped praise on LDB’s digital offerings and innovative multilingual services for Laos’s diverse customer base.

“The bank’s social media and SMS channels push timely financial tips and e-coupon deals to stimulate usage. LDB Trust’s interface is gamified with loyalty points and gold purchase alerts, making banking more engaging. Furthermore, all of LDB’s digital offerings are multi-lingual (Lao, English, Chinese) to serve Laos’s diverse customer segments. In essence, LDB blends marketing creativity with tech features, ranging from one-click bill pay to integrated gold/ e-commerce modules, ensuring that product innovation remains aligned with customer convenience and lifestyle,” he noted.

Community support during crises

LDB has consistently demonstrated social responsibility, particularly during national crises and economic hardship. During the severe floods in northern Laos in September 2024, for example, the bank donated 500 million kip to relief efforts in Luang Namtha province. This contribution helped provide food, water, and medicine to affected families, alongside other private sector aid. The action was widely publicised to encourage solidarity (“share heart” campaigns) and exemplified LDB’s commitment to community support.

Beyond emergency relief, LDB contributes to long-term economic resilience. In the aftermath of the COVID-19 downturn, the bank aligned with government stimulus by offering affordable credit. Management notes that LDB worked to ensure businesses “have access to finance at reasonable interest rates” during recovery periods.

The bank also sponsors financial literacy programmes and SME workshops, aiming to strengthen the broader economic base. Internally, LDB maintains employee training, welfare benefits, and corporate volunteering days, reflecting the “social” in its ESG stance.

To sum it up, LDB leverages its financial resources and expertise for social good, whether through targeted funding (flood and pandemic relief), supportive lending to small businesses, or public education on banking. These community-oriented initiatives complement its commercial objectives, promoting goodwill and stability in the Lao economy.

Positioning for the future

The Lao Development Bank, celebrating over two decades of service, has evolved into a key player in Laos’s socio-economic development. Established in 2003 through the merger of two state-owned banks, LDB has consistently worked to restore public confidence, drive inclusive growth, and align its operations with national development goals.

LDB’s transformation goes beyond technical upgrades; it reflects a strategic vision. By expanding its presence in underserved areas, the bank has worked to bridge financial gaps, enhancing economic equity across the country. This expansion is paired with significant investments in digital banking, including platforms like LDB Trust and LDB Biz, which offer services such as digital savings, credit, transfers, and investment management. These innovations have improved banking convenience and accessibility, helping Laos transition to a digital-first economy.

LDB stands out in the competitive Southeast Asian banking market for its holistic approach, integrating technology, forming strategic alliances, and promoting sustainability. Moreover, its involvement in ESG-driven initiatives, including carbon credit projects covering over 2.5 million hectares of forestland, demonstrates a strong commitment to ecological and social responsibility.

The bank’s focus on customer experience is evident in its user-friendly mobile platforms, real-time financial insights, and integration of loyalty programmes, QR-code payments, and digital gold trading. These efforts have created a seamless banking ecosystem that resonates with customers’ evolving needs.

LDB’s strong financial performance, including record profits, a high return on equity, and one of the region’s lowest non-performing loan ratios, underscores the success of its transformation. Its resilience in adapting to disruptions, like the COVID-19 pandemic, demonstrates its solid governance and technological foresight.

“We are well-positioned to lead Laos’s banking sector into deeper ASEAN integration, greater access to global capital, and a rapidly evolving digital economy. Our continued focus on SME financing, green infrastructure, and inclusive banking will shape Laos’ financial future, positioning LDB as a model for emerging market banks worldwide,” MD Douangchai concluded.

The post LDB: Mastering the craft of banking in Laos appeared first on International Finance.

In recognition of its wide-ranging contributions to the Laos economy, Uniqtek was honoured at the International Finance Awards 2024. Uniqtek Managing Director Chandavong Southitham was presented with the prestigious “Best Pioneer Entrepreneur in Surveying – Laos 2024”. This award further solidified his position as a visionary leader who has redefined the surveying industry through innovation, expertise, and a relentless commitment to excellence.

By adopting advanced geospatial technologies, drone surveying, and real-time kinematic (RTK) positioning, Chandavong Southitham has revolutionised surveying practices by delivering faster and more accurate solutions. His contributions have significantly enhanced project outcomes in construction, real estate, and environmental planning, establishing the Uniqtek boss as a true pioneer in the industry in Laos.

“Winning the Best Pioneer Entrepreneur in Surveying award is a testament to Chandavong Southitham’s ability to push boundaries and set new benchmarks in the profession. With a career spanning 10 years, he has consistently introduced innovative solutions, ensuring that surveying remains at the forefront of technological advancements,” Uniqtek told International Finance.

The International Finance Awards recognise companies’ achievements and growth potential across various sectors. By receiving this accolade, Uniqtek joins an elite group of industry leaders shaping the future of surveying. Their dedication to innovation ensures that the industry continues to evolve, meeting the challenges of tomorrow.

The “Best Pioneer Entrepreneur in Surveying” award is a well-deserved recognition of Chandavong Southitham’s outstanding contributions to the field. His visionary leadership, innovative mindset, and commitment to excellence have set a high standard for the industry, paving the way for future advancements in surveying and geospatial technology in Laos.

The post Uniqtek sets new standards in Laos surveying & monitoring appeared first on International Finance.

Regarding the company’s leadership, both Chanthone Sitthixay and Savanhthong Phongsavanh have extensive experience in various types of businesses, including the import/export of a wide range of products in Laos. PTL was established in 2008 and has been the second-largest company in the market by market share and revenue since 2011.

Petroleum Trading Lao currently deals with five categories of products: diesel oil, Benzene Regular 91, Benzene Super 95, bunker oil, lubricant oil and petrochemical products. The company sells petroleum through its own retail gas stations under the “PLUS” brand, which currently operates 110 stations across the country. These stations are managed under two models: Company Owned, Company Operated (COCO) for 30 stations, and Dealer Owned, Dealer Operated (DODO) for 90 stations. Additionally, the company also directly sells its oil-based products to project clients, industrial factories, and wholesalers in Laos.

PTL is the first company in Laos to be certified for outstanding international service quality. At present, the company has 300 fuel trucks. Furthermore, under Petro Trade, it is listed as Khouanchay Trading Export-Import Company Limited, which has brought various consumer products to meet market demand through its 20,000 retail stores across the country.

Since 2009, PTL has experienced rapid growth due to the vision of its founders and the executive team, who focus on controlling the quality of products and services. The company imports petroleum from well-known global suppliers through Thailand, Singapore, Vietnam, and Malaysia.

In 2012, the company launched a new type of station designed to meet the daily needs of people in cities, providing convenient, quick, and safe services. PTL has since expanded its stations, increasing the total number of gas stations to cover the entire country, making it the second-largest in Laos for two consecutive years.

In 2013, the company increased its registered capital from LAK 75.60 billion to LAK 350 billion. This increase in registered capital was aimed at expanding additional stations, improving product quality control, and enhancing organisational efficiency to meet international standards (ISO 9001:2015, 14001:2015, and 45001:2018), and to become a professional organisation capable of serving the ASEAN Economic Community (AEC). PTL also improved its gas transport system and enhanced employees’ knowledge. From 2014 to the present, the company has continued to maintain high-quality products and develop services to improve its reputation. The depots now can store up to 5,610,000 litres of oil domestically, and the company leases two seaport terminals in Vietnam with a storage capacity of up to 100,000 metric tons. The total number of gas stations is 110.

The company has also increased its registered capital by issuing common shares through an initial public offering (IPO) on the Lao Securities Exchange. Petrotrade was also in the news recently for signing a Memorandum of Understanding (MoU) with the government, local authorities, and foreign countries, including the concession project agreement for the Vung Ang Seaport project in the Republic of Vietnam. Additionally, the company is involved in the Vung Ang Seaport Laos-Vietnam Development State Enterprise in partnership with the Lao administration.

PTL has signed an agreement to develop a 2,000 MW coal power plant in the Boualapha district of Khammouane province. It will also conduct a feasibility study for a railway construction project in Khammuan province, a project that will connect to the Vung Ang Seaport.

The post Petroleum Trading Lao revolutionises fuel access appeared first on International Finance.

Over the past decade, the venture has revolutionised how Laotians manage their finances, ensuring that its platforms remain accessible to all, whether the client is an individual, a small business, or part of a large organisation. BCEL Bank’s digital platforms, BCEL One and i-Bank, have remained central to this transformation, offering its customers the flexibility to bank anytime, anywhere.

BCEL One: A Full-Service Bank In Your Pocket ‘One For All’

Explaining the product, BCEL Bank told International Finance, “Imagine the convenience of having a full-service bank at your fingertips. With BCEL One, that’s exactly what you get. Our mobile banking app gives you secure and seamless access to all your banking needs, from local and international money transfers to paying bills for water, electricity, telecom services, and even taxes. You can also make fund transfers and much more, all from your phone.”

“Our QR code payment system extends beyond Laos, making it easy to use in countries like Thailand, Vietnam, South Korea, and China through our partnership with UnionPay, enabling payments through WeChat Pay, Alipay, and other popular international platforms,” it added.

BCEL One even offers automatic currency exchange to simplify international transactions for its users. With over 1.6 million satisfied customers, BCEL One has transformed the way Laotians bank, with the tagline, “It’s all about making banking simple and putting control in your hands.”

I-Bank: Empowering Businesses With 24/7 Financial Management

For businesses and organisations, managing finances has never been easier than with i-Bank, BCEL One’s web-based platform designed for corporate needs. Whether it’s managing accounts, high-value transactions, or international transfers, i-Bank offers an intuitive, secure solution that’s accessible on a 24/7 basis.

“Enhanced with OTP codes and tokens, i-Bank provides the highest level of security, making it suitable for users of all digital skill levels. Whether you’re handling significant funds or cross-border operations, i-Bank empowers you to focus on what matters most—growing your business,” the bank remarked.

“At BCEL Bank, innovation is at the heart of everything we do. We’re committed to making banking better, more secure, and more accessible for everyone, contributing to financial inclusion and the sustainable growth of Laos. As we strive to maintain our strong position in the market, we continue to advance our technology to meet international standards,” it added.

As BCEL Bank celebrates 35 years of serving Laos, it has marked the milestone by introducing new features and products that will further revolutionise digital banking.

The post BCEL Bank: Revolutionising banking for Laotians appeared first on International Finance.

Facilitating payments, transfers of money and increased financial inclusion are becoming the key elements of a digital economy. Among the key players shaping the particular domain, International Finance will talk about Lao Mobile Money Sole Company (M-Money), which has emerged as one of the major stakeholders in the Lao PDR’s fintech and financial inclusion push.

Knowing The Company In Detail
With a population of 7.4 million (with a median age of 26), Lao PDR possesses a bright and dynamic socio-economic future. However, a major impediment for the Southeast Asian country has been the poor number of bank accounts held at any one of the nearly 42 individual banks in its jurisdiction. The number stands at only around 1.5 million. Out of the addressable market of approximately 4.5 million people, nearly 3 million individuals lack access to banking products and services.

People who wish to borrow small sums of money fall victim to loan sharks and end up paying up to 20% monthly interest. After its inception in 2019, M-Money quickly realised the problem and now has become a leader in offering the type of financial services needed and demanded by millions of people throughout the country, while promoting financial inclusion.

The venture’s goal is simple, to start providing micro-loans to its customers in the near future.

“As with many non-bank systems that have sprung up globally (especially in countries such as Kenya – M-Pesa – and the Philippines – Smart, Gcash) M-Money is filling a huge gap left between the banked and un-banked, and bringing access to financial services to thousands of people daily,” M-Money told the International Finance.

“Growing the system from inception was not an easy task, and many existing regulations regarding digital or mobile money services had to be revised in cooperation with the respective government agencies, while other guidelines had to be developed and implemented to ensure security, safety, and system integrity – in short developing a mobile payment system that would offer the type of secure and trustworthy services demanded by agencies as well as individual customers,” the company added.

During its launch in 2019, the firm boasted a nationwide network of 186 agents through whom customers could perform cash-in /cash-out services. It has since then grown to well over 3,500 locations, intending to expand to a minimum of one agent per village in villages with a population of more than 300 people.

M-Money Is Here To Make A Difference
Offering cash-in/cash-out points; however, is not the only mechanism on which a mobile money system can function. To make things effective, you need a robust merchant network as well as government-related financial services such as social security, tax, and payment of other benefits, which are an integral part of a fully inclusive economic system, and keeping in mind this principle, M-Money is working closely with agencies to improve their efficiency and capacity to serve the people of Laos.

“With more than 30,000 merchants around the country linked to the M-Money system (and growing daily), customers can purchase many of their daily necessities without the use of cash – a simple scan of a QR code links their payment to the merchants. Similarly, electricity, water, and many other utilities can be paid for through M-Money. When it comes time to remit taxes, or receive pay-outs from the Government, M-Money handles those transactions seamlessly,” it stated further.

One of M-Money’s near-term operational goals is to offer inward remittances from family members living and working abroad.

“For many families in Laos, being able to receive money from their children living and working in nearby Thailand is essential. At present, the system is convoluted, slow, not secure, and expensive. It is M-Money’s goal to be able to allow family members to remit money to their families back home quickly, easily, and most importantly, securely. The inward remittance will benefit not only the many families living in rural areas of the country, but will also strengthen the economies of those areas as access to money through M-Money will mean they can make their purchases near home,” the company explained things further, while interacting with the International Finance.

“Instead of the necessity to travel to larger urban centres to receive their cash and then spend it in those centres on necessities while there, M-Money helps save money by reducing the need for travel, meaning purchases of necessities will be more likely to happen near home, in the villages,” it noted.

All these efforts bring M-Money ‘s vision of financial inclusion of Laotians under the full circle as the venture has expanded its operational scale from local village-level agents to remittances from abroad, while ensuring more purchasing power for its domestic customers.

The Road Ahead
M-Money’s activities and hard work in the front of digital and financial inclusion have not gone unnoticed, and in 2023, the venture was recognised by the International Finance Magazine as the “Fastest Growing Mobile E-Wallet 2023”. Also, at the recently concluded “Fourth ASEAN Digital Ministers Meeting”, M-Money was awarded Bronze at the ASEAN Digital Awards for Digital Inclusivity.

Despite all the above laurels, M-Money knows its work is far from over, with challenges awaiting it, as the venture eyes a transformation of the Laos socio-economic order from being a cash-based one to a “Cashless Society,” while ensuring financial inclusion for all.

“We will continue to drive these efforts and play a leading role in overcoming the digital divide. It is the Company’s vision to be able to facilitate the financial transactions of a nation on the cusp of moving from a least-developed country to a developing country within ASEAN, Asia, and the world and to ensure that all members of society have access to the financial services they need and have a right to demand, whether at the village, city or national level,” M-Money concluded.

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Q: Lao Development Bank is a two decades old Government Bank. September 2021 CSE partnered with the Government. What do you think has been the journey in the last 10 months?
A: I sincerely thank the International Finance for paying attention to the new management of our bank (LDB). In the past 10 months, I would like to confirm that all parties, including the Lao government, the Bank of the Lao PDR, employees and customers have pleasantly welcomed the new board of directors with satisfaction and provided good support. We have goals and strategic plans defined in the 6-month plan before officially signing a joint venture with the government. I and the board of directors have led and managed the organization with a vision, have a complete systematic plan, focus on actual work and transform the new mechanism of the Lao Development Bank to be able to run smoothly and effectively.

Q: Can you give us some insight on how you managed such a transformation (if it is not so confidential)?
A: Definitely much of this is confidential but we can give you some examples to get an understanding of how we think now. One – we thoroughly analyzed the bank financials and business before we devise our strategies. We knew exactly how many thousand dollars are un-utilized, we calculated exact Cost of Funds, we knew what exactly effects our Cost of Funds, we could precisely tell which branch is over using funds with less returns, we could precisely see which branch over spends (in comparison to their business volumes) and so on. We have defined a clear strategy, with the work of the board of directors in a systematic manner. For all goals and action plans are defined in a standardized structure.

Two – based on all our research & analysis, we had clear and very focused strategies with the work of the board of directors in a systematic manner. Goals and action plans for all verticals & horizontals were well structured. Three – We have recruited employees with knowledge, experience and we have improved the welfare policy for employees to stimulate and encourage the performance of employees.

Q: It sounds like you had a very clear plan of action. Can you also elaborate a bit more about some of your business strategies (again, if it is not very confidential)?
A: Maybe I share some examples – We have created and trained our employees along with using modern technology to transform the new image of LDB. If we do not focus on the development of technology systems, we would really feel handicapped. In 2022, we will have improved the technology continuously and firmly. We can see the number of customers who have used our Mobile App (LDB Trust) have significantly increased.

Q: That looks to be the right balance of Technology and People, great! Technology has been a pain point for all banks in any small market. The budget never seems to be enough to justify the massive investments needed for ever-changing banking technology. What did you do in this space?
A: Thanks for asking this. A lot of this actually is highly confidential. We can still share the large picture so that you can correlate to it. We do not think the technology budget is the major challenge for our development. We have many internationally recognized and renowned technology development partners. Therefore, all we did was to choose the right tech partners and motivate them to do better.

Q: So, it looks like you had to make some bold decisions for your tech partners. Do you also want to share some of your future plans and strategies?
A: As of now, we can only say keep watching. We are determined to change the banking segment and we would surely provide what is best for our customers and for our staff.

The post Lao Development Bank gets awards from International Finance appeared first on International Finance.

UniqTeK Company Limited (UTCL) is a Lao-owned company established under the Laws of the Lao PDR. The company is a professional supplier of survey equipment namely, land survey equipment, UAV, mining equipment, environmental equipment and hydropower and electrical-mechanical equipment. The company also provides surveying solutions and installation of electrical works, communications network and network cabling.

Additionally, the company also provides survey solutions such as aerial mapping, topographic survey, cadastral survey, reference stations, and project solutions such as transmission line survey and design, hydropower survey, mining application, road and bridge survey, land management system, irrigation mapping survey to their customers. Their clients range from multinational companies, government agencies, NGOs, developers, SMEs, and farmers.

Mr. Chandavong Southitham spoke about the vision he and UTCL have. He said: UniqTek was built on the foundation of providing excellence to its market and customers. The company is driven by the mojo of “striving to be the most reliable business partners”.
The firm treats the client as business partners, which means the foundation of its existence is to help its partners succeed in their goals.

The company has three major mission statements. First to reach international standards, second to build a systematic and dynamic approach to the services they provide and third, to introduce and update products and technology.

“We try to do research and bring in new and high-tech products into the market 24 months before the market is ready and we educate the market”, Southitham said.

UTCL has a different approach to becoming a leader in the field. The company doesn’t engage in price wars with other competitors rather they provide value to the customers. They believe “if they help the client solve problems, they will grow along with them. Instead of treating it as a buy-sales relationship, the company sees the client as a partner,” Southitham said.

When asked about the competitors in the Industry, Southitham says the intensity of the competition is not high as it is a very technical and specific industry.

“We are the pioneers with very little competition and no strong competitor that we face,” he added.

UTCL has not restricted them from selling equipment to the customers, they provide solutions and build infrastructure as well.

“We help build digital base stations so clients and non-clients can be pulled into the ecosystem. This makes it very difficult for the competitor to match or build. Another strength is we always invest in research and new technology. We always bring in technology that is ahead of the market by 24 months,” Southitham said.

UTCL has achieved some major milestones in its success journey. UTCL is the only firm in Laos to help develop digital land management for the Department of Lands. It is the only company to install Continuously Operating Reference Stations (CORS) in Laos. The company holds 95% market share of RTK and drone products. It has grown from a 03-person company to 100+ members within eight years. Moreover, the company fully supports and funds employees’ best practices. Their motto is “train clients until they are experts”.

UTCL also offers several staff benefits. Southitham says, “We have health insurance and value the health and safety of our staff. Since the foundation of the company, we have never signed a single contract with our employees, yet our turnover is very low. Many staff who currently work for us have been with us for at least 05 years. Our staff retention is successful because we offer them a say in the company, we always welcome constructive feedback; allow them to be trained in and outside of the country. Most importantly, we care about their long-term personal life development goals and make sure what they do align with what they want to achieve in life”.

The post UniqTeK Company Limited: The success story appeared first on International Finance.

The bank has won the International Finance Award for Best New Mobile Banking Application – MJ Saduak – Laos 2019.

The bank has introduced its new retail mobile banking app MJ Saduak which supports  QR payments and provides access to ewallets for better banking services. In an interview with International Finance, CEO Anthony Chin discusses the current developments in Laos’ banking landscape, the role of Maruhan Japan Bank in the country and its plans for the next two to three years. 

How does the Laos banking landscape look like? Could you please tell us more about  Maruhan Japan Bank’s performance?

Laos is an emerging economy and is increasingly a prime market for banking opportunities in the Asean region. If you closely look at Laos’ banking landscape, there are about 43 banks catering to a seven million population. So I would say it is kind of crowded.

Competition is quite stiff for such a small industry. Laos  is growing as an economy. By comparison, Laos’ GDP per capita is better than that of many countries in the Indo-China region. It has already surpassed $2,000 and that’s a lot higher than Myanmar in Cambodia which started developing a lot earlier. 

It is a good indication in terms of growth but I think there is rising demand across the banking landscape. I think we haven’t reached an inflection point but I can kind of sense it. I’m from Malaysia and I have been in Laos for six months. Now the airport has at least eight cafes with a beer bar and an upcoming duty-free shopping zone which was lacking when I first arrived. 

I am quite excited about March 2020 because we are a Japanese bank and  there is going to be a direct flight to the south of Japan. As the Laos economy grows there will be more activities and travellers in the country, better productivity and rising demand for payments. With that, banks and non-banks will have a significant role to play.

The banks, microfinance companies and non-banks are trying to tap into the existing opportunities in the country with a seven million population. I think the market is going to get quite interesting. In the next two or three years, I think we will see a real demand for banking services. 

That said, I am the CEO of Maruhan Japan Bank, which is a fully owned Japanese bank. We have established sister banks in Cambodia and Myanmar and their operations are quite large. However, in Laos we are quite young. Maruhan Japan Bank is only a few years old and we have embarked on our three-year strategy. So it’s really important and humbling for us to win the International Finance Awards in a short duration. 

Why is it important for Maruhan Japan Bank to become digital? 

Maruhan Japan Bank’s three-year strategic transformation can be attributed to our goal to become an established bank. We don’t need to be the biggest but we want to be the best in our core segments. As part of our three-pronged strategy, we want to achieve the following three key targets: 

First, we want to be the most trustworthy bank in Laos. Being a Japanese bank, trust is our core principle. We don’t simply focus on  integrity, compliance and governance but are very keen to establish customer trust. It is important to deliver services on time. Therefore, we not only want to be the most trustworthy bank but also seek to deliver the best customer experience. Our focus is to ensure superior experience during customer engagement — and this can only be achieved if we use technology wisely. For that reason, digital remains at the forefront of all our operations. 

Digitisation is a necessity today. And if we don’t deploy technology in our banking operations and to serve customers — we will be overlooked soon enough. Today, customers across demographic groups seek instant gratification. 

If you take a close look at going digital, it is really about serving our customers and community at large.  In Laos, I think that is vital to what we do because it helps us create financial inclusion in provinces and regions that remain unbanked. 

Of the seven million people in Laos, only about one million hold bank accounts. So technology and mobile data enable us to serve the unbanked. I have truly believed in the saying ‘Banking is transactional but money is emotional’. Although we are dealing with money, there are emotions attached and that’s why customer experience is key. I think digital customer experience and being trustworthy come together. 

What are your plans for the bank moving forward?

We have big aspirations but it takes a lot of hard work to achieve them. We have already outlined our plans for the next one to three years in terms of what we want to build and deliver. This kind of growth must be sustainable and responsible. It should add value to the economy, community, shareholders and always be in line with the vision of central bank as well as regulators. 

We will ensure that we make improvements in a step by step process. We have gone live with our mobile app called MJ Saduak. Saduak in Laos means simple. The mobile app went live in November. It is simple to use, download and enables users to make payments on-the-go. The mobile app enables QR payments and has an ewallet that allows customers to go to any of merchants. 

Maruhan Japan Bank is swiftly expanding. We have also included a very simple chat bot to ensure customers can seamlessly contact the bank. The chat bot also includes a very simple financial management tool to help Laotians, consumers and customers learn about saving and investment. 

Besides financial inclusion, we also want to improve financial literacy in the country. We plan to automate operations in our branches and enable a lot of simple processes so that more and more people can be a part of the banking community. 

In the future, we aspire to work with partners who want to build an ecosystem. In turn, this will allow us to work with SMEs and businesses. We aim to establish a strong link between the bank, merchants, ecommerce players, businesses and regulators. 

In a nutshell, we want to help customers achieve their dream of purchasing a car or acquiring a loan. What customers really seek  is not a bank but services that can cater to their needs. That said, we are brainstorming on how to provide these services to customers in the two to three years. 

Every quarter our customers expect to see a new service from us and that’s our plan over the next three years. While I talk a lot about customers, the environment and the community, another key focus is to build a very cohesive team with a common vision. 

The bank has a very simple programme called cast which is in line with protecting the environment and spreading awareness. I promote a very open culture in the bank. 

What are the challenges you anticipate and how do you differentiate Maruhan Japan Bank from its competitors in the country? 

That’s a good question. It is quite hard to differentiate yourself in a highly competitive industry. For example, technology is a tool that has been deployed by everyone across industries today. It is as simple as buying a ten thousand dollar equipment and stating that “this is my latest technology to enable a new service” — and with that, your competitor will invest in a technology worth twenty thousand dollars. So the competitive advantage in this context is lacking. 

A good example is ATMs. Customers no longer visit bank branches to withdraw money — and likewise, there is not much left to differentiate banks if their logos are taken away. So it simply comes down to how banking staff implement services, the quality of customer experience and the level of trust established. 

We are working hard to build solid trust with our customers that will help to differentiate us from competitors. Today the banking industry is crowded and homogeneous. Currently, several foreign fintechs are launching ewallets in Laos stirring competition in the domestic banking and finance industry. 

I hope the bank will deliver premium services to customers, and stakeholders in the next two to three years. More importantly, we want Maruhan Japan Bank to become the most trusted bank in Laos. 

The post Maruhan Japan Bank seeks to become the most trusted bank in Laos appeared first on International Finance.

We are absolutely delighted to win this prestigious award from International Finance for the Best Customer Service Bank – Laos 2019. We are honoured that the award panel has recognised Phongsavanh Bank’s efforts to provide superior banking services in the Lao market. This award is not only a strong external endorsement of our service capabilities, but will also give us a strategic competitive advantage in attracting more clients.

Phongsavanh Bank’s vision is to be the bank of first choice in Laos. What is the progress achieved by the bank on this vision? 

In order to be the first bank of choice in Lao People’s Democratic Republic (PDR), Phongsavanh Bank is focusing on the five P’s: People, Products, Policies, Process and Place. 

With regard to the first ‘P’ (people), we have made significant progress in attracting well-experienced international talent in strategic functions such as risk management, treasury, finance, HR, credit, AML, and IT security.  Also, we have launched a programme for onboarding well-educated Laotian staff with bilingual skills.  These new resources in turn have helped in developing and strengthening the next three ‘P’s — Products, Policies and Processes. 

The bank is going through a transformation, and we now have a dedicated department to drive reengineering efforts to deliver results effectively and efficiently. The fifth ‘P’ (Place) is related to the significant progress we have made in building and expanding our Distribution Network with over 40 branches and service units, together with over 100 ATMs and 650 POS terminals across the country.

We believe all these efforts will go a long way in building our brand.

What role is Phongsavanh Bank playing in the development of Laos and in supporting foreign investors in the country? 

Phongsavanh Bank has been in the business for 13 years, while our parent, Phongsavanh Group carries forty years of industry experience. Our group companies have a rich history of collaborating with international players in telecom, petroleum trading among other sectors. 

Over the years, we have established strong relations with the diplomatic missions of all countries that have a presence in Lao People’s Democratic Republic (PDR).  Our Group is always on the lookout for joint investment opportunities with foreign investors who are looking for a reliable and trusted partner with strong local market knowledge and influence.

More recently, Phongsavanh Bank established a dedicated International Business Department to offer banking services to foreign investors in Laos. Our bank played a pivotal role in advising the government on its first international USD bond issuance, which turned out to be successful among investors. This debt issuance is a big step toward deepening our capital markets.

In 13 years Phongsavanh Bank has achieved rapid growth. What are the reasons behind the rapid growth of the bank? 

The rapid growth of Phongsavanh Bank can be largely attributed to the first-mover advantage that we have had as the nation’s first private 100 percent Laotian-owned bank. 

Our bank was established by our visionary founder Prof. Dr. Od Phongsavanh in 2007 at a time when the banking sector was largely controlled by government-owned banks.  During that period, there were too many restrictions on banking transactions and people preferred to hold cash, or turn to unorganised sectors such as money lenders and money changers over banks. Our bank removed those hurdles and simplified banking services with fair pricing. This in turn encouraged customers to move toward traditional banking channels. As Phongsavanh Group was already well-known and a trusted name in the market, we were able to attract several new clients in the early years.

Subsequently, we expanded our distribution network across the country, which led to onboarding of several unbanked customers. We facilitated responsible growth by ensuring that anti-money laundering considerations were fully complied with.

What is your outlook for the banking sector in Laos over the upcoming decade and what role will Phongsavanh Bank play in the development of this critical sector? 

The banking sector in Laos is playing catch-up with regional peers in terms of sophistication. We expect rapid transformation to take place with the country’s sustained high economic growth. This will prompt more banks to make substantial investments in technology, particularly on digital initiatives. More sophisticated products can be offered when government regulations around capital movements are relaxed and capital markets open up further.

As Laos is an over-banked economy with over 40 banks, we also expect some consolidation and shake-out, where marginal players may get taken over or shut down by the regulators.

Phongsavanh Bank is closely monitoring these market developments in order to take advantage of emerging opportunities. Our bank is also collaborating with the regulators and multilateral agencies to improve the AML regime and legal infrastructure in Laos. We work closely with Anti-Money Laundering Intelligence Office (AMLIO) and United Nations Office for Drugs & Crime (UNODC) on AML initiatives. Also, we have provided critical inputs for an upcoming regulation related to Enterprise Bankruptcy Law.

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