SME bank wants more cash from government
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The government should lend the Small and Medium Enterprises Development Bank 30 million kyats for the next fiscal year, which begins in April, to speed up the development of small and medium-sized enterprises, a senior adviser to the bank, San Thein, said
The amount is six times what the government provided the bank for this fiscal year, which ends in March.
“We have already received a loan of five million and have requested another loan of 30 million kyats,” San Thein said.
The government provided the loan at a low rate, allowing the bank to lend to SMEs at 8.5 per cent rather than the usual rate of 13 per cent.
San Thein also said the bank was working with agencies from other countries, including Germany, to provide technical assistance to SMEs. It recently signed a memorandum of understanding with the Industrial Bank of Korea that will see the Korean lender provide it with technical expertise, he added.
Myanmar’s under developed banking system poses numerous challenges to the development of SMEs, including high interest rates and the absence of long-term loans.
Myanmar Central Bank deputy director-general Thein Zaw said SMEs also face challenges in providing required guarantees and collateral. Financial management skills are very weak and there was no systematic gathering of statistics and other data, he said.
It is estimated that there are more than 120,000 SMEs in Myanmar. More than 90 per cent are in the industrial sector, but less than half are registered with the government.
