The Japan International Cooperation Agency (JICA) will offer US$40 million in loans to small- and medium-sized enterprises (SMEs) from March, according to an SME seminar in the Union of Myanmar Federation of Chambers of Commerce and Industry (UMFCCI).
The JICA loans will be passed to the government, which will then distribute them to banks from where the loans will be sent to SMEs.
Hisao Ando, an official from the JICA’s Myanmar office, said: “The JICA will offer loans to SMEs for their growth and development. It amounts to 5 billion Japanese yen (US$40 million). We are conducting training for human resource development as well.”
The Small and Medium Industrial Development Bank (SMIDB) will also disburse loans to the SMEs.
A plan is under way to take loans of US$20 million from Singapore and a direct loan of US$30 million from the Bank for Investment and Development of Vietnam (BIDV).
SMEs loans will be disbursed with an 8.5 per cent interest rate and commercial loans at 12 per cent.
The SMEs need to use property as collateral for their loans and submit recommendations from state or regional governments.
In 2013, the SMIDB disbursed loans of Ks 10 billion offered by the government to 62 SMEs, and will offer loans of Ks 20 billion this year.
According to the Ministry of Industry, there are more than 120,000 registered SMEs in Myanmar making up 99 per cent of the economy.