Faster, easier loans for Mandalay SMEs

The chair from Loan Implementation sub-committee, U Maung Maung Win, who is also the deputy minister for planning and finance, headed the meeting.

It was held on Sunday at the Mandalay Regional Chamber of Commerce (MRCCI) premises.

U Maung Maung Win said a working committee will ensure that a separate loan facility will be set aside for the Mandalay business community to ease their burden.

The private sector development committee is chaired by Vice President U Myint Swe.

U Maung Maung Win said, “The Myanmar economic Bank (MEB) has ordered all banks to give Credit Guarantee Insurance (CGI) loans for the business community but only the Cooperative Bank(CB) has prepared that kind of loan,” he said.

He added that a loan from Germany would also be available for business persons.

Meanwhile, entrepreneurs in the SME sector say they face many challenges such as financial needs and technology as they struggle to get a market share while competing with imports that are cheaper and better quality.

SME committee chairman U Win Htay from the MRCCI told The Myanmar Times that although there are SME loans from Japan as well as other types of loans, these do not have many benefits for local entrepreneurs and are not suited for the business here.

So far, only four enterprises have received the ‘2 Steps’ loan from the Kanbawza Bank (KBZ) and 10 business concerns have received CGI loans in Mandalay.

U Win Htay said, “The CB bank gives CGI loans but SME businesspersons can get at most K 200 lakh. Many entrepreneurs have applied for SME membership and have tried to take loans.

“But sometimes they need to give a collateral such as land ownership certificates because the bank says their businesses were not solid enough for a loan.”

SME development is a priority in Myanmar’s economy, and getting loans for business is critical.

Myanmar started the SME Central Development Department in 2012.

It then started to provide loans for the business community from 2014. In 2014, Mandalay received K1 billion for SMEs.

Ko Okka Yaw, from the Myanmar Computer Professionals Association, Mandalay Region, told The Myanmar Times that the loans meant for SMEs went to very big business concerns.

U Win Htay said that well-connected enterprises got SMEs development loans from international sources.

Mandalay has also pushed for SMEs development since the U Thein Sein government took over the country’s reigns.

The NLD government also targeted to improve the SME sector and said that loans are crucial.

International NGOs and loans from other countries have supported the development of the SMEs sector but there is room for improvement.

At a SME development workshop held in the MRCCI last September, regional chief minister Dr Zaw Myint Maung said, “In the economic sector, we need to develop SME enterprises.”

He said that the Mandalay SMEs need to come up with an appropriate environment.

“We need to make one unique product to penetrate the world market. The Mandalay division needs to try to produce its own product.

“Why can’t we become a developing country with a federal system that has dignity? We need to set up an appropriate taxation system. And we will share theses resources,” said Dr Zaw Myint Maung.

He also lamented the fact that Myanmar’s workforce with average age of between 18 and 35 years old were abroad. He said that an urgent call for them to return will be made.

Regional Finance Minister U Myat Thu told the workshop that “We will create a pleasant economic and education environment. If we do not have proper technology, we cannot compete. Will we use the traditional way or do we leap frog into a modernised industry?

“We need to connect with foreign countries. Financial support is vital. It is important to provide loans for potential enterprises to expand,” Dr Zaw Myint Maung said.

“There are 40,000 registered SMEs in the country. We know there are many hurdles in getting financial support. We need to evaluate our currency system. We need to revamp our banking system,” U Myat Thu said.

Source: Myanmar Times