SMEs get more foreign loans
Minister for industry Maung Myint says he is planning to take a total of US$50 million - US$20 million from Singapore and US$30 million from Vietnam - to disburse soft loans to small- and medium-sized enterprises (SMEs).
“Taking foreign loans is ongoing. The ministry will disburse soft loans to SMEs when we receive them,” said the minister.
Further loans are planned from Japan although the details are yet to be released.
“Japan has disbursed SME loans via the Small and Medium Industrial Development Bank [SMIDB] and other banks. The finance ministry will serve as the medium as Japan’s loan is a step-loan,” he added
About 99 per cent of Myanmar’s businesses are SMEs and many face difficulties securing capital, especially the unregistered firms. Germany is providing technical assistances to SMEs and the SMIDB is beginning to offer loans at an 8.5 per cent interest rate.
“Currently, the government has disbursed Ks30 billion to SMEs via the SMIDB at 8.5 per cent interest. There is only a 0.25 per cent margin. The SMIDB has to operate at a loss on non-performing loans. This project incurs losses,” he continued.
Meanwhile the SMIDB yesterday announced that it is preparing to provide Ks 90 billion ($90 million) in loans.
The bank obtained the money from the Myanmar Economic Bank. The loans will be given preferentially to the industrialised businesses.
SMIDB earmarked Ks 20 billion for loans last year, but only Ks 14.75 billion were lent. The remaining money will remain available for loans this fiscal year.
SMIDB was organised with an aim to fulfil the financial needs of the SMEs.
Business owners can apply for loans with the approval of their regional governments. They may borrow between Ks 10 million and Ks 100 million and must pay off the loans within three years