THE Export-Import Bank of Thailand (Exim Thailand) is gearing up to provide more loans for Thai companies venturing into Myanmar on expectations of a long-awaited economic boom.
The bank would provide more loans to Thai and Myanmar businesses that are considering using a wide range of Thai products in their commercial operations in Myanmar, said Pisit Serewiwattana, the president of the bank.
“We have been financing all kinds of infrastructure projects in Myanmar for more than two decades. From now on, we will provide loans to businesses that are engaged in bilateral trade,” he said in an exclusive interview.
“Obviously, business between Myanmar and Thailand has been increasing a lot. We expect a higher volume of trading between the two countries in the months to come.”
Business volumes have increased more than 30 per cent since the bank opened a representative office in Yangon two years ago. Pisit expects the scale of bilateral trade and investment to more than double in the next five years. “We expect the volume is going to be increasing more and more, and we cannot wait to play a more active role in boosting the bilateral trade and investment,” he said.
The bank has provided a lot of loans to infrastructure projects in Myanmar, with a key focus on much-needed areas such as electricity and transport. To date, the bank has lent out nearly US$650 million in Myanmar, supporting a number of projects regarding power plants, road improvement, along with upgrades of airports and the construction and upgrading of transmission lines.
“We do not limit the business sectors, and also do not have a budget limitation to provide loans in Myanmar, as it is critical to our overseas expansion. Among the CLMV countries, we are fully confident in Myanmar’s potential,” he said, referring to Cambodia, Laos, Myanmar and Vietnam.
The bank has signed memorandums of understanding with state-owned Myanmar Foreign Trade Bank as well as two private banks, KBZ and CB. Through the cooperation schemes, it aims to promote bilateral trade by setting up credit lines to local banks so that they manage to finance the Myanmar companies that need to buy Thai products and services.
“We encourage Myanmar companies to contact us directly. If they have some interest in any kind of cooperation with Thailand and their business is quite successful, we can provide loans up to five years, depending on the products they import,” said Pisit.
The cooperation with KBZ and CB will also lead to the provision of low-interest loans to local businesses that are engaged in any trading activities with Thailand.
“The interest on the loans is cheaper than the rates that KBZ and CB can borrow in the market. We ensure an interest rate of at least 1 or 2 percentage points lower than the rates that they would normally get on loans,” he said.
“The loan period is up to the products they import. They can do it from three months to two years. If they want longer products such as machinery, then we can extend the loan period.”
At an event entitled “Exim – F.T.I. CLMV Business Matching” in Yangon yesterday, the bank brought 30 Thai companies in the food and beverage industry to Myanmar so they can seek out counterparts across the border.
Pisit joined Supant Mongkolsuthree, chairman of the Federation of Thai Industries, in leading the team of 50 entrepreneurs on the three-day trip to Myanmar. During the trip, the Thai businesses had fruitful discussions with a number of local businesses, importers, and distributors engaging in modern trade, hypermarts, and department stores.
Bilateral trade rose by 5.5 per cent - or $69.5 million - in the first three months of fiscal 2019 from the same period last year, according to Myanmar’s Ministry of Commerce. Thai products such as beverages, confectionary and packaged foods are widely popular in Myanmar due to their cheap prices, high quality and accessible border trade, Deloitte’s Myanmar Consumer Survey says.