Loan scheme for SMEs needed: bankers
Play
Bankers are calling on the government to help the country's small and medium-sized enterprises obtain the loans most need to survive by opening a credit guarantee corporation and credit information bureau.
“Governments around the world have formed credit bureaux to review the backgrounds of small enterprises. Our government should form one as well for our small and medium-sized enterprises,” said San Thein, a senior advisor to the SME Development Bank.
A branch manager of Tun Foundation Bank said the Central Bank is attempting to form such a bureau as well as a credit guarantor, but said private banks were not following its lead.
A state-owned entity that offers a loan to an SME facing obstacles could help it get back on track, the branch manager said.
Than Lwin, a banking advisor at the Ministry of Finance and Revenue, said “a trustee
association or committee should be formed for SMEs that are not able to provide collateral [for loans].”
“Banks should reduce some requirements for a loan and the government should support more microfinance banks to help SMEs run smoothly,” Than Lwin said.
Finance and Revenue deputy minister Maung Maung Thein is trying to implement a credit bureau that helps SMEs obtain loans without collateral, officials said.
Central Bank deputy director general Thein Zaw said SMEs often failed because loans were short-term or too small while interest rates were too high. Small businesses also often lacked collateral to take out a loan, he said. Weak management and erratic cash flow also played a role, he added.
Early this year the government formed a central committee and work committees to implement measures to assist small- and medium-sized enterprises.
It is estimated that there are more than 120,000 SMEs in Myanmar and that more than 90 per cent of them are in the industrial sector. Less than half, however, are registered with the government.
