Vientiane, Laos – In a significant move to increase agricultural commodity production, the Lao government has unveiled a series of credit policies aimed at easing farmers' and entrepreneurs' access to low-interest capital from financial institutions and microenterprise promotion funds. Historically, many producers and businesses in the agricultural sector have struggled to secure affordable financing, often resorting to high-interest, short-term loans due to limited government funding and a lack of specific credit policies for agricultural production and processing.

The new credit policies, identified as the eighth and final policy in the National Policy on Crop Cultivation Encouragement, were approved by Decree No. 226/TTg on July 10, 2023. These policies are designed to facilitate easier access to suitable financing for farmers and entrepreneurs engaged in the cultivation and processing of agricultural commodities. They also aim to align financial institutions, farmers, and business operators with the conditions, laws, and regulations governing the sector. The specific credit policies are as follows:

For producers and business clusters involved in short-term crop cultivation and industrial crops such as rice, corn, cassava, watermelon, yam, long beans, soybeans, fresh vegetables, avocados, peanuts, figs, sugarcane, and bananas, the policy stipulates a loan term of over three years with an interest rate of 5% per annum. Interest payments are due in the first and second years, with principal and interest repayment commencing in the third year.

For those cultivating and processing fruit crops, including mangoes, peaches, oranges, lemons, cashews, and almonds, the policy sets a loan term of over seven years with an interest rate of 3% per annum. Interest and principal repayments are waived until the fourth year, with repayments starting in the fifth year. This provision also includes policies for the cultivation and processing of nuts and dragon fruit, with loan terms over five years, an interest rate of 3% per annum, and a waiver of interest and principal until the third year, with repayments beginning in the fourth year.

For coffee producers and processors, the policy outlines a loan term of over seven years with an interest rate of 3% per annum, with interest and fees waived until the fourth year and repayments starting in the fifth year. For tea, the loan term is set at over five years with an interest rate of 3% per annum, with interest and principal waived until the fourth year and repayments starting in the fifth year.

For entrepreneurs establishing plant processing factories and plant products, the policy provides a loan term of over five years with an interest rate of 3% per annum. Interest and principal are waived until the fifth year, with repayments starting in the sixth year.

These credit policies represent a strategic effort by the Lao government to stimulate growth in the agricultural sector, which is a cornerstone of the nation's economy. By providing more favorable loan conditions, the government aims to encourage investment in agricultural production and processing, thereby increasing productivity, improving quality, and enhancing the competitiveness of Lao agricultural commodities in the global market.