Lao SMEs are at an early stage of development, and face various problems. One of the most
important problems is financial constraints. In order to promote SMEs as engines of growth, it is
crucial to understand the issues surrounding SMEs' access to finance. The main objective of this
study is to examine the barriers confronting Lao SMEs' access to finance and to identify the
contribution of financial access to SMEs performance. In addition, factors enabling successful
access to finance are investigated. 198 samples from a nation-wide survey are used for this study.
The results show that access to finance could improve SMEs' performance. But Lao SMEs face
various financial constraints such as collateral, complex application processes as well as a limited
economic environment and options for financial sources. Only a small portion of SMEs are able to
access finance. However, larger domestic firms, in terms of capital, which are determined to grow
their businesses, seem to have a greater possibility of being able to access financial sources.