Ministry of Planning, Finance and Industry relaxed SME lending rules to allow small and medium enterprises with only one year’s track record to apply for loans

The Ministry of Planning, Finance and Industry has relaxed SME lending rules to allow small and medium enterprises with only one year’s track record to apply for loans.
Prior to this, only SMEs with two or more years of track record were eligible to apply for loans.
“We are planning to provide loans to one-year-old SMEs. Not to every one of them, but those with great potential for success,” said Daw Aye Aye Win, director general of the Department of Small and Medium Enterprise Development.
When applying for SME loans, small businesses usually have difficulty providing tax receipts as they typically make under K10 million in annual profits and are thus exempt from paying income tax.
The department has lifted the tax document requirement for SMEs with annual profits of up to K10 million.
“Currently, banks require borrowers to provide tax receipts and SMEs request that the Internal Revenue Department issue them,” said Daw Aye Aye Win.
The department is in talks to increase CGI (credit guarantee insurance) loans to SMEs to K100 million from the current K20 million.
The interest rate for SME loans is 13 percent per annum and the same rate applies to USAID CGI loans for agriculture-sector SMEs and Shop Owner loans as well.

(Myanmar Business Today: https://mmbiztoday.com/ministry-relaxes-sme-lending-rules/ )

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