Small and Medium-sized Industrial Development Bank (SMIDB) and Japan International Cooperation Agency (JICA) are holding talks on the loan disbursement to local Small and Medium-Sized Enterprises (SMEs), according to the sources.
“As part of it, the JICA is observing the local banks, but has yet to reveal the banks’ name. It seems that firstly the JICA will study the situations of the banks. And the JICA will make its final decision only after studying the banks. First of all, they will pick up one or two local banks,” said Tin Maung Htay, managing director of SMIDB.
The SMIDB is disbursing the loans to SMEs with an interest rate of 8.5 percent. The SMEs need to take recommendations from their region/state governments so as to get the loans.
“The SMIDB disburses the maximum loan of Ks 100 million to one enterprise. It depends on their region/state governments’ recommendations. But some entrepreneurs get Ks 50 million in loan. Since December, 2012, the SMIDB has been disbursing the loans to SMEs. The SMIDB had Ks 10 billion since its inception, but now it ran short. Now we have got Ks 20 billion from Myanma Economic Bank (MEB) with an interest of 8.25 percent. Then, the SMIDB will grant loans to SMEs with an interest rate of 8.5 percent. As of the end of July this year, the SMIDB will disburse loans to SMEs with the use of Ks 20 billion,” he added.
The SMEs account for 99 percent of all enterprises in Myanmar. The SMEs are in need of huge capital investments and are facing difficulties in the availability of loans. There is widespread news that the JICA will grant loans to the SMIDB and the CB bank for re-disbursement of loans to the SMEs. The SMIDB said they have yet to know it exactly.
“We can provide more aid to local banks if Japan extends a helping hand to us. Currently, many local banks want to take loans. But we have no enough capital. The SMEs on their part will have take responsibility for their successes,” he added.
“It is difficult to revival domestic SMEs. I do not know how they go on,” said an entrepreneur.
Source: ELEVEN MYANMAR