The Small and Medium Industrial Development Bank has provided loans to 12 entrepreneurs in the first month of a new lending service to small and medium-sized enterprises (SMEs), it said.
The bank has earmarked Ks 20 billion (US$20 million) for lending to SMEs under a new programme that began in August that covers all states and regions. Its chairperson, Dr Than Htun, said the loans were given to the entrepreneurs on the recommendation of the state or regional government where the applicant will launch or expand his or her SME.
Loans of up to US$100,000 can be obtained, with the amount determined by the collateral offered. The interest rate is 8.5 per cent and the duration of the loan is three years. Loans from private banks carry interest rates of up to 13 per cent.
Last year the bank lent Ks 10 billion to 62 SMEs. The industry ministry estimates that the number of SMEs exceeds 120,000, but economists have said they have been severely constrained by a lack of access to credit. Expanding loans to SMEs will hasten and diversify economic growth, economists say.
The bank is planning to borrow $20 million from private financial institutions in Singapore and $30 million from the Bank for Investment and Development of Vietnam to increase lending to Myanmar SMEs, it has said.
Source: ELEVEN MYANMAR