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As small and medium-sized enterprise (SMEs) are in the main sector of national economic development, the government is encouraging their development. Accordingly, the State-owned Myanma Economic Bank(MEB) will disburse loans to entrepreneurs who are actually running the businesses and in need of capital investments under this special programme.
Loan eligible enterprises
The businesspersons who want to apply for a loan must be an SME recognized by the Directorate of Industrial Super vision and Inspection (DISI), Ministry of Industry. The MEB will grant loans to export sector business, import-substitute businesses, technical based production businesses, service businesses which directly help economic development, and organizations and individuals that have been recommended by regional, state or union governments. The loans will be disbursed to the SMEs which are eligible in accord with the prescribed rules and regulations.
Interest Rates and Periods
Interest rate is 9 percent, and periods are form 3 to 5 years.
Loan Volume
Maximum loan volume will be Ks (300) million for an individual SME or an organization’s SME, and MEB would grant 50 percent of a loan to SMEs as working capital and the rest as fixed capital.
Collateral
Borrowers can give fixed assets such as land and buildings, movable assets such as machineries, vehicles, gold wares and gold bullion, money, treasury, bills, treasury bonds, stocks, debentures, bank insurance, government insurance and Credit Guarantee Insurance as surety and collateral for the loan. Currently, the loans with the Credit Guarantee Insurance (CGI) will only be disbursed at a maximum of Ks(20)million.
Loan repayment period
For three-year loans, the first year is a grace period and the repayment is in four installments over the last two-year period. For four-year loans, the first one year and six months is a grace period and the repayment is in five installments in the last two and a half year period and for five-year loans, the first two years is a grace period and the repayment is in six installments over the last three-year period.
Loan scrutinising
Regions and States Manager Offices will scrutinise the loans below Ks(100)million and the headquarters of Myanma Economic Bank( MEB) will scrutinise loan applications above Ks(100)million. Businesspersons who would like to apply for a loan can receive detailed information and can apply for the loans at the nearest branches of the Myanma Economic Bank (MEB).