I have reading The Phongsavanh Group that own the only Laos privately own bank!
http://www.phongsavanhbank.com/background.php

I am thinking why don't we start our business owning a new bank in Laos! Since they only need deposited the minimum capital reserve requirement of US$2.5m well in advance of the Bank of Lao PDR. The Bank has a registered capital of US$10m. I am sure we can raise that kind of money own self (Laos who live aboard) What do think? It's a business idea feel free to express. Why it's not good or It's a good ,but!

I don't think many Lao people who live abroard will want to start a bank business in Laos with that much money. They probably need to have good knowledge of bank operating procedures too.

If they already have millions of dollars, then they must be doing something right in their country. I say just continue with what they are already doing, instead of throwing all that money into a risky business in Laos.

She right, a bird in the hand is worth two in the bush. I'll tell you a true story about a so called rich family that I knew in Vancouver Canada who went to Thailand with their fortune and came back broke within a year. This Laos/Thai family of 4 had some connections to make money in the drug trade in Vancouver. After a few years of doing "business", they decided to sell their house and go to Thailand and start a business with their family there. I'm guessing they had about 1 million cdn with them at the start. After a year, we saw them come back with sad faces like someone had died in their family. They went back to living in a 2 bedroom apartment in the bad side of town and lived quietly ever after. They went to do business with their own blood family and got eaten alive. Doing business in a foreign country is risky business to begin with. Not being able to trust even family, now that tells you something. Money is thicker than blood over there so you better have deep pockets.

It's would be set-up like Share system. Everyone would own part of it. to own part of it can start from as little as $500 to $200,000. We will be paying the experience and expert in this field to manager business!

A lot of Laos live aboard have asset of over 1 million easily this day. Bank business is not risky business if you know what you are doing!

What's the cost of borrowing in Laos?  Like what is the interest rate for a commercial loan? Is there such a thing as a mortgage loan for a HOME?

Someone told me that most Laos people buy stuff CASH! 30K, 40K, 50K CAR =  CASH!

Loan = trust
cash = no trust
Laos loves ca$h

When I was there, you could only withdraw up to $1k US out of the banks per week. Someone told me the gov't banks don't have enough money to cover. My dad's friend who lives there was given old planes from the gov't since they didn't have the money to pay him for some reason. So they gave him the old planes to strip down and sell the metal, that was how they paid him, pathetic don't you think?

Most people are buying cash! but the bank is making money from the fee and the commercial borrowing. some with project that involve with foreign aid.(The Aid organiser don't trust Laos Government to manage the Money,While sitting here. we can invest or lent to someone that would need it) I think won't be long Mortgage type of product would be on offer.

BorLeumBanGerd, everything has to be made in cash but not necessarily paid in full if you don't have enough money.

For example, if a house is worth $30,000, you're expected to pay at least $15,000 up front and the other half can be paid in installments which will include interest. How much monthly payment and interest is worked out between the buyer and seller.


Buk Hoo Kee, I'm still laughing after reading your post about your dad's friend. Sorry I thought it was funny.

>> I like you enthusiasm and your benevolent intentions of trying to help bring $$ to local Laotians to establish or build businesses.  There are so MANY uncertainties or RISKS involved.

1 - Government rules and regulations to protect banks. Do you get tax INCENTIVES from governments?

2 - Market and Currency RISKS. Volatile times in BANKING IN THE WHOLE WORLD.

3 - Borrowers NOT HAVING SUFFICIENT ASSETS to securitize the loans. I DON'T THINK YOU WANT TO LOAN OUT $$ FOR NOTHING. If the loans were to default, how QUICKLY can you SELL that collateral and GET YOUR $$ BACK?

4 - OVERALL lack of knowledge and understanding about credit, lending and securitization by local Laotians.  Most borrowing in Laos is by TRUST and WORD OF MOUTH!

5 - Is there a BIG enough market for you to MAKE MONEY? WILL IT BE PROFITABLE ENOUGH? Do the RISKS outweigh REWARDS?

6 - How/Where would you get a CREDIT CHECK on BORROWERS? You need to know their history...you can't just lend out $$ to anybody. Again, this goes back to the question of TRUST?  At least in US and I'm sure in Aussie as well, there are BACKGROUND and CREDIT CHECKS you can do on borrowers!

7 - LASTLY - WHAT IS YOUR LEVEL OF EXPERIENCE, KNOWLEDGE and TRAINING in BANKING, LENDING, MANAGING a BUSINESS?

Top 2 reasons why new companies FAIL:

# 1 - LACK OF CAPITAL. The business does NOT have enough $$ to operate, pay employees, supplies, etc. Companies need a LOT of reserve capital to keep business running b/c the first 6 months..will NOT be PROFITABLE.

# 2 - Business owners LACK of KNOWLEDGE, TRAINING, EXPERIENCE and DECISION MAKING

These are you some examples. If I missed some...please feel free to ADD. I typed this up in 10 minutes....

My suggestion to you...keep you $ 1 million (AUD)..invest in TAX FREE municipal bonds..SAFER and GOOD RETURNS!

Just thought of 1 more thing also IMPORTANT:

8 - QUALIFIED EMPOYEES! You definately need educated and well qualified employees that understand banking and all its rules and procedures and local LAWS pertaining to LENDING.

Qualified employees are plentiful, otherwise there wouldn't be any banks operating in Laos at the moment. Local Laotians are smarter than you think.

When thinking of starting a business in Laos, you need to understand that Lao law favours the locals and protects us. It's easier for foreigners to get into trouble so understanding the law is first things first.

Every business is have some kind of risk involve!
I don't a qualification in banking,but that doesn't mean I don't know anything about it.
American and Europe in trouble because they lend to any one even they know they can't pay back and no security over the loan. most lender just want to know how much they can get that commission at end of that month. I call is "Greed" That why most you are in trouble. Australia have a tough banking system. we don't just lend to anyone. We may make less commission but we are secure.

I can see you think like people who work for Public servant. you probably never in any business before. You have a very high education than me. Do you think Bill gate and Warren Buffett know every about his business,I think not. because he is paying someone to do that job for them. As long as you have a good business system. that will make the company running smoothly. You have to learn to trust.....and take risk. as long is minimum..... that will be ok........
Our Parent have lose every thing their got and I got only one dollar when I got here....  I would always try.....to do again and again.....  

MY RESPONSE LISTS SOME OF THE FUNDAMENTAL THINGS PEOPLE SHOULD CONSIDER BEFORE JUMPING IN TO OPEN A BUSINESS.  

IT WAS NOT INTENDED TO INSULT OR OFFEND ANYONE'S EDUCATION OR SKILLS! SO PLEASE DON'T TAKE IT AS SUCH.

THINGS TO RESEARCH...THAT'S ALL I'M SAYING... THE MORE RESEARCH YOU DO...THE MORE PREPARED YOU WILL BE TO RUN A SUCCESSFUL BUSINESS.

Good Luck with your business!

This is just a suggestion. I am not going to jump in with out knowing any rule & regulation and Tax law in Laos. what kind of benefit for a foreign company to invest in this kind of business I don't know yet! I just thought to apply for the bank licence is so expensive in other country. In Laos only need 2.5M and about 10M in capital that is consider a small business in the Western country.
After the research  come back with a minimum risk and write good business plan would be quite easy to raise this kind of money. We have to go in as a Foreign company in other to get international law to protect us from the deal go bad. any thought on that, please feel free to add!  

Here's link to the most respected law firm in Laos.

http://laolaws.com/index.html

Thank for you suggestion on using this law firm! It's look like half of this law firm have law degree from Melbourne, Australia.