VIENTIANE - As the Belt and Road Initiative has advanced, the Laos-China Bank (LCNB) has been providing practical services to help small and medium-sized enterprises (SMEs) in Laos solve their financing problems and injecting vitality into the development of Lao enterprises.

The LCNB was established in 2014 as a joint venture bank between Fudian Bank of China's Yunnan and Banque Pour Le Commerce Exterieur Lao (BCEL).

In terms of banking services, for large-scale projects invested by China in Laos, the LCNB has launched the "supply chain financing products." Meanwhile, for SME projects of the World Bank in Laos, the LCNB has also launched a special loan service for SMEs, LCNB Managing Director Deng Yu told Xinhua recently in Vientiane.

Despite the presence of over 40 commercial banks in Laos, their products and services are simple, especially financing business where capital is poured mostly to big enterprises, leaving a "hole" of SME services in the financial market.

The LCNB has placed itself in the area of financial service for local SMEs to fill the "hole" and open a new path of business.

According to statistics by the Lao Ministry of Planning and Investment, as of the end of 2016, China invested in 764 projects in Laos, covering various fields including mining, agriculture, energy, handicrafts and tourism, among others.

From these projects, as many as 552 of them are 100 percent Chinese-invested and 212 are China-Laos joint ventures. China has become the biggest foreign investor in Laos.

It has been reported that some of the suppliers and subcontractors involved in China's investment projects in Laos could not get credit support from large banks and, to a certain extent, this has affected the progress of Chinese investment projects.

The LCNB subsequently provided a variety of financial services to enterprises which have good credit, stable purchase channels and payment sources, without requiring a credit rating and collateral security like traditional banks, thus efficiently solving financial problems for SMEs.

For the construction of the Saysettha Comprehensive Development Zone in Vientiane, the provision of a timely loan from LCNB for the LJ construction company in Laos, a contractor of the project, had helped the company complete construction of roads, water supply and drainage system before rainy season, contributing to improving the appearance of Vientiane.

At the same time, the LCNB has also actively participated in the World Bank's financing projects on promoting the development of SMEs in Laos.

In August 2014, the World Bank and the Lao government signed an agreement on supporting financing for SMEs in Laos, which would provide $20 million of preferential funds for Lao banks, and provide long-term financing services through commercial banks to qualified SMEs in Laos. Through bidding, after evaluation by the World Bank and Lao Ministry of Industry and Commerce, the LCNB has become an agent bank of the project.

Through intensive investigation of the enterprise's situation, the LCNB has recommended to the World Bank the Lao MKE Electronics company, the agent of China's Huawei mobile phone in Laos, making MKE company the first enterprise to obtain an SME loan from LCNB, which helped promptly solve the company's capital shortage situation.

In addition, the LCNB has also helped THIVA company, which makes traditional Lao clothes, shawls and other silk products, to obtain SME project funding to overcome difficulties in business.

As of Dec. 2016, within the WB SME financing framework, LCNB had accumulatively approved nine loans for SMEs with a total loan amount of over 11 billion Lao kip ($1.35 million). The loans involved SMEs in the sectors of trade, construction, handicrafts, among others, and has provided strong support for the development of a number of local SMEs.

Under the guidance of the Belt and Road Initiative, the LCNB has taken a strategy to help local SMEs solve their financing difficulties, becoming a solid bridge for economic and trade exchanges between China and Laos.