State owned Myanma Economic Bank (MEB) will lend K250 billion to local small and medium-sized enterprise (SMEs) in the 2018- 2019 fiscal year, in addition to managing JICA's two-step loan for SMEs

State-owned Myanma Economic Bank (MEB) is planning to lend K250 billion to local small and medium-sized enterprises (SMEs) in 2018-19 fiscal year.  The loan does not include loans from the Japan International Cooperation Agency (JICA), said Daw Nilar Wai, Assistant General Manager of MEB (Yangon Office).

Earlier this month, JICA said it will lend 11.5 billion Japanese yen (K151.685 billion) to SMEs in 2018-19 through domestic banks. The two-step loan will be managed by MEB under its SME loan programme. The interest rate for the MEB loan will be 9 percent, while JICA’s loan will be carry a lower interest rate of 8.5pc interest, targeting entrepreneurs.

Meanwhile, MEB will offer funds to more established SMEs in the manufacturing, production and trading, import substitution, recycling and energy saving as well as services sectors. SMEs that borrow from the MEB must channel at least half the funds into fixed capital and the other half as working capital.

Borrowers who are able to put up property as collateral, will be eligible to a maximum of K300 million in funds. Those who do not have property will be able to get access to K20 million via the Credit Guarantee Insurance Scheme.

The MEB loan term is three years with a grace period of one year and must be repaid over four installments in the last two years.

If the loan term is four years, the grace period will be 18 months and there will be six repayments in the last two and a half years. And for a loan term of five years, the grace period will be two years and there will be six repayments in the last three years.

(The Myanmar Times: https://www.mmtimes.com/news/myanma-economic-bank-will-lend-k250b-smes.html )

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