Interest rate for SMEs to be reduced

Loan interest rate for the country’s small and medium-sized enterprises (SMEs) will be reduced from 13 per cent to 8.5 per cent early next year, according to the ministry of industry.

The new interest rate, however, will still remain higher than those in the neighbouring countries, which offer SMEs loans at 1 to 6 per cent rate.

Identifying high interest rate as a major problem for the sector, Thein Zaw, deputy director general of Central Bank of Myanmar, said the SMEs are also facing difficulties with short-term and insufficient bank loans.

To help the SMEs, the government is working to introduce long-term loan changing its one-year loan term policy for the sector.

German International Cooperation will offer 4.5 million euros (US$5.82 million) in aid for the development of SMEs in Myanmar, the ministry of industry said.

The government has transformed the Myanmar Industrial Development Banks into SME Banks as part of its efforts to boost the development of sector, Aye Aye Win, deputy director of SMEs Department of the ministry of industry, said, adding that 88 per cent of the country’s businesses are SMEs.

 

source: Eleven Myanmar

http://www.elevenmyanmar.com/business/1818-interest-rate-for-smes-to-be-reduced