A Model to Financially Support SMEs in Laos in View of The Life-Cycle Theory.

Abstract

This article study Recently, small and medium-sized enterprises have played a crucial role in enhancing economic growth, creating plenty of opportunities, and improving the efficiency of industrial structure. However, due to Laos's behindhand financial system and defective financial market, it makes it impossible for Laos to financially support those SMEs. With an economic system reform and the Economic Corridor strategy, the financing needs of SMEs in Laos are increasing. The previously financial support model cannot effectively solve ongoing financial difficulties faced by many small and medium-sized enterprises. This article initially aims at the development of SMEs in Laos and analyzes the main problems and financial market thoroughly. Hinged on the Life-Cycle theory, the characteristics and needs of the development of Laos' SMEs, in different stages, are refined. The financial support model of each stage is designed in combination with the current financial market in Laos, to provide a new approach and a solution to enhance the development of small and medium-sized enterprises.