Myanmar Tourism Bank will provide tourism association members uncollateralized SME loans beginning this month

Myanma Tourism Bank has announced that it will begin providing Union of Myanmar Travel Association members uncollateralised SMEs loans beginning this month.

MTB announced the SMEs loans for UMTA members, who are primarily travel and tour companies, at an event in a hotel in Yangon yesterday.

“We will release the loans within two week to a month if the applicants have provided the necessary documents for their application,” said MTB Deputy Managing Director Andrew Khant.

While the loans are being initially offered to UMTA members, MTB will later on open them up to other tourism-sector businesses, Khant said.

The interest rate for the uncollateralised loans is set at 13 percent a year and applicants are also required to take up credit guarantee insurance (CGI) from Myanmar Insurance.

The maximum amount for the loans is set at K20 million for applicants who show viable plan for the use of the funds.

“As a tourism-related bank, we will focus on lending to this sector. But we also plan to offer financial support to other related sectors and businesses to add further support for the tourism industry,” said MRB Chair U Yan Win.

However, some tourism-business owners say they are less than happy with the interest rate for the loans and the requirement to take up the credit guarantee insurance, which will raise the cost of the loan. 

“As a businessmen ,I think the rate for the loan is too high. But we face difficulties in getting loans with other bank so we welcome MTB’s efforts. Most small tour companies need some sort of financing,” said U Than Naing, the owner of a tourism business.

According to Ministry of Hotels and Tourism statistics, there are roughly more than 2500 travel and tour companies in the country, but the majority are categorised as small and medium-sized enterprises. Meanwhile, UMTA has around 1000 members.

MTB was one of five sector-specific banks granted a banking licence by the Central Bank of Myanmar (CBM) in 2017. It was founded by a public tourism company during U Thein Sein’s government. K2 billion was raised to start the bank so it could help boost the tourism sector.

The bank aims to offer low interest rate loans to assist the tourism sector.

At present, there are a few large hotel, and travel and tour companies in Myanmar that are able to invest large amounts to finance their businesses. The bank is located on 347 Pyay Road, Kamayut township, Yangon.

(The Myanmar Times: https://www.mmtimes.com/news/bank-provide-tourism-association-members-no-collateral-loans.html )

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