The small and Medium Enterprise Development Bank (SMIDB) will contribute K1 billion ($1 million) in loans in each of Myanmar’s seven states in a bid to support the countries’ local business sector, an SMIDB official said.
The loans will be distributed regionally throughout Myanmar at an interest rate of 8.5 percent over three years.
SMIDB has already granted K20 billion ($20 million) with an 8.5 percent interest rate to SMEs throughout Myanmar this financial year.
U Tin Maung Htay, managing director of SMIDB, said the state loans will provide monetary support for the small and medium enterprises (SME) in the country.
“The loan will be disbursed this month, following recommendations from representatives from the state and regional governments,” he said.
State-run SMIDB was established in 1996 and currently has 13 branches in Myanmar.
Daw Khin Thein, managing director of Min Htet Kaung Manufacturing, said the comparatively low interest rates offered by SMIDB will draw local businesses in Myanmar to the loans.
She said SMIDB will provide bank loans of up to K150 million for a collateral worth K600 million, and when compared with other private banks the interest rate is cheap.
The K1 billion state contributions from SMIDB will see small and medium enterprises become more competitive in Myanmar’s growing economy, she added.
“If the monetary support provided through the regional loans can help increase the production capacity of local businesses in Myanmar, then the whole country will benefit from the sector’s financial returns.”