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October 15, 2019

Yangon Government to grant loans to 100 SMEs

A man drying clay pots in the sun. Informal businesses face hurdles accessing financial support. Photo: Phoe Khwar
A man drying clay pots in the sun. Informal businesses face hurdles accessing financial support. Photo: Phoe Khwar

The Yangon Region government has chosen 100 small- and medium-sized enterprises from over 40,000 SMEs in Yangon Region for grant of loans, said U Myint Thaung, the Regional Minister for Planning and Finance, at a press conference held on Wednesday at the Yangon Region Investment Committee’s office.
“There are over 40,000 SMEs across Yangon Region. We have shortlisted 100 SMEs which have the greatest potential to develop their businesses. Of these 100, over 40 SMEs have already received loans, while around 60 have been issued recommendation letters. Currently, we are negotiating with the concerned banks to issue them loans. The Loan Appraisal Committee has approved loans of over 60 SMEs out of the 100. We are making arrangements to provide loans to 100 more SMEs in the second phase,” said the Minister.
“We are planning to provide loans to 100 more SMEs in the second phase for bringing about the development of the SME sector in Yangon Region,” said U Phyo Min Thein, the Chief Minister of Yangon Region.
“We are making arrangements to issue recommendation letters to 100 more SMEs. We are also raising awareness among SMEs regarding the use of cash in a systematic way because SMEs are family-owned businesses and their bank accounts are not large enough to secure such loans,” said U Phyo Min Thein.
“There are two types of loans granted to SMEs — loans with collateral and loans without collateral. Without collateral, SMEs can receive only between K20 million and K50 million in loans, and with collateral, they can get loans amounting to between K200 million and K300 million, depending upon the value of the collateral,” said U Myint Thaung, the Minister for Planning and Finance.
“Some of the small businesses cannot put up collateral such as plots of land or flats to obtain loans from the bank. So, such small businesses receive loans of lesser denominations,” the Minister remarked.
“Banks grant loans to SMEs in accordance with their policy. As part of its efforts to develop SMEs, the Yangon Region government is trying to secure overseas loans such as two-step loans, said the Minister.
SME businesses such as small and medium-sized industries, arts and crafts, lacquerware, tourism, fisheries, and cottage industries will be given priority in the grant of loans. (Translated by Hay Mar)

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