Vientiane, July 25, 2006 – The Government of Lao PDR announced this week that it plans to develop new finance industry legislation with technical assistance from the International Finance Corporation’s Mekong Private Sector Development Facility (IFC-MPDF). The new Financial Insitutions Law is expected both to attract new investors to the finance industry and to strengthen industry supervision by the Bank of Lao PDR.
Adam Sack, General Manager of IFC-MPDF, praised the government for its commitment to improving the finance sector environment so that financial institutions can thrive. “By providing a level playing field, this new legislation is expected to encourage more privately-owned financial institutions and improve bank regulation and supervision. It should also encourage more competition in the finance industry. A strong and competitive finance industry is a key contributor to private enterprise development. Giving individuals and businesses better access to finance promotes economic growth and helps to reduce income inequality.”
In the framework agreement signed with the government, IFC-MPDF agreed to support the Drafting Committee by reviewing existing financial legislation, and helping to draft new legislation. IFC-MPDF will also advise on international best practice and facilitate consultation with stakeholders to get their feedback and recommendations.
Ms. Sengdao Bouphakonekham, Director General of the INTERNATIONAL Relation Department of the Bank of Lao PDR, thanked IFC-MPDF for its support. “Together we can make sure that international best practice is followed by Lao PDR’s financial institutions, but tailored to the conditions and needs of our country.”
This approach to developing new legislation is similar to what IFC-MPDF provided to the committee drafting Lao PDR’s new Enterprise Law, and continues to provide in implementing the legislation. IFC-MPDF also has strong ties with the private sector through its efforts to help government establish the Lao Business Forum and ongoing work as the Forum’s secretariat.
