Small and Medium Industrial Development Bank (SMIDB) will provide Cash Flow Based (CFB) loans without collateral

Small and Medium Industrial Development Bank (SMIDB) will provide Cash Flow Based (CFB) Loans, based on six-month term loan without collateral to small and medium enterprises with the annual interest rate of 8.5 percent.

“The Cash Flow Based Loan does not require collateral, instead it looks at the financial flow and profit margin of the borrower’s business,” Dr. Zeyar Nyunt, CEO of SMIDB, said.

“We are now providing loans to small businesses and those who don’t have working capital. We will also give credit, which equal one third of the value of the businesses, to those who are operating their businesses on a rented factory and want to have their own factories,’’ he added.

The bank will provide the non-collateral loans by lending up to K30 million using funds from the bank, they will not loan money by using the two-step loan system, which uses JICA’s grant fund. So far, the bank has not disclosed the total amount of loaned money.

“Some garment manufacturers do not own the land or factory they are operating their business on, instead they rent the land or facility. If the bank provides 35 percent of what they need to buy the land or factory, it would be great for the garment business,’’ Daw Khaing Khiang Nwe, Secretary of Myanmar Garment Manufacturers Association, said at the press conference on the loan held at UMFCCI on January 19.

In providing non-collateral loans, the bank will provide loans to producers in the agricultural sector, livestock sector and manufacturing sector.

In applying for the loan, applicants will need to provide business license and registration, tax payer receipts, SME association membership card, documents of the business, recommendation letter of the administrator of the area, license by related ministry and ownership or leasing contract.

Currently, SMIDB has provided the total 5.7 billion in Cash Flow Based (CFB) loans to over 150 business owners so far.

(Myanmar Business Today: https://www.mmbiztoday.com/articles/smidb-provide-loans-without-collateral )

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