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Companies to receive COVID-19 loans, but discrepancies hamper number of approvals

The government has approved COVID-19 loans for 88 businesses at an interest rate of 1 percent, according to the Union of Myanmar Chamber of Commerce and Industry (UMFCCI).

But the UMFCCI received more than 1600 applications for the loan on the April 9 deadline.

According to U Naung Naung Han, chair of the Myanmar Tourism Entrepreneurs Association, there are discrepancies between most of the applicants’ financial reports and the loan amounts they are asking for, which has made it difficult for the authorities to approve loans for the majority of applicants.

He said most tour companies are applying for loans under K50 million, while some hotels require loans of K100 million or more, depending on the number of employees.

The government last month established a COVID-19 Fund worth K100 billion (US$70 million or 0.1 percent of GDP) at the Myanmar Economic Bank. The funds will be disbursed as soft loans to affected businesses in the garment and tourism sectors as well as small and medium enterprises at a 1pc per annum interest rate for a one-year period, with terms to be reassessed as needed.

Half of the fund will be supplied from Myanmar’s revolving fund while the remaining half will be drawn from the social welfare fund.

Income and commercial tax payments due in the second and third quarters of the fiscal year have also been made extendable to the end of the fiscal year. An exemption for the 2pc advance income tax on exports to the end of the fiscal year has been announced.

Monetary measures include an easing of the policy interest rate by 1.5 percentage points effective April 1.

Meanwhile, the Central Bank of Myanmar has also halted deposit auctions to maintain adequate liquidity in the interbank market. –

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Source : Myanmar Times

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