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SME Development Bank Provides up to K300 Million Loans to SMEs
17/09/2019
Author: Myo Sandar: SME Development Bank will provide up to K300 million loans to local small and medium enterprises using the loans it borrowed from the Japan International Cooperation Agency (JICA).
“We will provide the loans to local SMEs that meet the requirements set by JICA. We will focus on enterprises from Chin State and Kayah State,” said Dr. Zeyar Nyunt, Chief Executive Officer of SME Development Bank.
Chin State in Myanmar receives the least amount of investment of all regions and states in the country.
SMEs in these two states must have three years of business history, according to the Small and Medium Enterprises Development Law, in order to receive a loan. SMEs that have received previous loans from the SME Development Bank can also apply for this loan.
The interest rate is set at 8.5 percent by JICA, and the loans must be used for purchasing machineries for the business and expanding the business.
The SME Development Bank will provide loans under Credit Guarantee Insurance, as well as lower collateral requirements.
SME Development Bank has provided loans to over 500 small and medium enterprises, and Dr. Zeyar Nyunt remarked the bank’s SMEs loans are successful because they provide them in stages.
He explained: “Let’s say we decided to provide K10 million to a SME. We would provide the first three million kyat to the owner and verify that it goes into the business. Then we would provide the next three million kyat and do the same thing. The remaining four million kyat would be provided after the first two stages are verified.