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JICA Offers K1.3b Loan to SMEs

JAPAN International Corporation Agency (JICA) is going to lend K1.3 billion via local banks to small and medium-sized enterprises (SMEs), an official from JICA told The Myanmar Times.

JICA also extended a K41.5 billion loan to private SMEs in Myanmar last year, the official added.

During this fiscal year, JICA’s loan for SMEs will work in two steps. They will first lend to local banks via the state-owned Myanma Economic Bank. Local banks include SME Development Bank, Kanbawza Bank, Myanmar Oriental Bank, Ayeyarwaddy Bank and Myanmar Citizens Bank.

Local banks will have to define terms and conditions for the loans. But the organisation cannot provide loans for various sectors, namely agriculture, real estate, insurance, gemstone, liquor shops and restaurants, entertainment, ammunitions and more.

The SME Development Bank – one of the banks included in that loan program – is now accepting applications for a JICA SME loan. The application must be in line with the regulations set by JICA and the applicant will have to submit a business license and development committee license.

In addition to the JICA loan, more loans can be obtained through the World Bank and United Nations Development Programme’s (UNDP) loan services for SMEs, Myanmar Entrepreneur SME Institute CEO U Zin Phyo Paing said.

The UNDP has been extending loans in other cities throughout the country but there is no loan management at present.

“Lending money to SMEs alone will not do. Loan management should be supported as much as possible. For example, how to manage a loan for a certain period of time, starting from the receipt of a loan; when to pay back; how to generate more revenue based on the loan etc.

 

Source: The Myanmar Times

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