Small and medium enterprises in Mandalay Region will be able to acquire loans from Co-Operative Bank (CB), commonly known as CB Bank. The two types of loans under a Credit Guarantee Insurance system will be for businesses and another for real estate.
Some businesses will be able to apply for limitless loans while others who cannot provide enough collateral are set to Ks20m.
Businesses can receive loans within two weeks if they have been operating for two years, after supplying necessary information. Loan must be repaid in a year, but if the business is thriving, the loan can be extended, according to U Zaw Man Oo, the head of CB Bank SME Banking department speaking on 27 June.
“The new system is to help businesses owners avoid other strict loan regulations, Those SME businessmen who are seeking license from the Ministry of Industry are entitled to apply for this loan under the laws of SME,” said Daw Yee She Khaing, the director of the department of SME development.
The businessmen have to be the members of SME, hold business licence and need to be citizens. The interest rate is set at 13% per annum, and another 3% is to be given to Myanma Insurance. The interest is required to be paid monthly.
This loan system requires a recommendation from the SME association, credit guarantee insurance and bank.
U Ye Win Aung, the secretary of Industrial Zone Administration Committee said that this system is not attractive to SME businesses because of the process and the loan is only for a year with no guarantee of extension.
Aung Thant Khaing