Myanmar Economic Bank will provide loans under a special program for SMEs, which focus on export and have a direct effect on economic development

Myanma Economic Bank (MEB) will provide loans under a special program for SMEs, according to its notice on January 29.

The notice said that the bank will prioritize services focusing on export and having a direct effect on economic development, and SMEs what the state and regional governments recommended.

The bank will prove up to K300 million loans to any individual or organization working on SMEs with the annual interest rate of 9 percent, with a  three to five year repayment.

SMEs that receive loans must use 50 percent of loans as fixed capital (fixed assets are such things as land, buildings, vehicles, plant and equipment), and the other 50 percent as working capital, according to the notice.

The bank will accept unmovable assets such as real estate as collateral for the loan, and movable assets such as machines, vehicles, gold jewelry and gold block, every kind of deposit money, government monetary bonds, stock shares, debenture, bank insurance, government insurance and credit guarantee insurance as collateral as well.

It will provide up to a K20 million loan with credit guarantee insurance. In paying off the loans, borrowers can pay back in four installments over two years, with a one year grace period if the payment program is three years. With a four year loan, borrowers will have a one-and-a-half-year grace period, with the repayments being made in five installments over the last two-and-a-half-years of the loan. The five year loan has a two year grace period, and the repayment must be made in six installments in last three years.

The notice also said eligible SMEs can apply for loans up to K100 million at the offices of the regional and state managers, and the MEB headquarters will scrutinize loan applications above K100 million. 

MEB made an announcement last year saying that that it will provide K200 billion for the agriculture sector, K300 billion for SMEs, and K200 billion for the construction sector.

MEB also called for application of loans with three to five year payment program for sectors such as agriculture, livestock, enterprises related to agriculture and livestock, manufacturing, trade, export, import substitute manufacturing, recycling and energy saving, technology based manufacturing and services, constructions and production of construction materials.

(Myanmar Business Today: https://www.mmbiztoday.com/articles/myanma-economic-bank-provide-sme-loans-under-its-special-program )

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