The European Investment Bank (EIB) will lend €30-€100 million (US$40-$134 million) a year to small and medium enterprises (SMEs) in Myanmar through local banks, said a joint statement from the EU-Myanmar Task Force last week.
The EIB and the Central Bank of Myanmar (CBM) signed an initial agreement on finance cooperation in Nay Pyi Taw on November 15.
CBM vice president U Set Aung said, “We are going to sign the framework agreement next February. Probably selected local banks will then receive loans from the EIB.”
The detailed procedures for lending to SMEs in terms of interest rates and repayment schedules will be discussed in the framework agreement, and the EIB will provide technical assistance for the development of the finance sector, he said.
The European Investment Bank will focus on infrastructure projects, including transport and energy, on environmental projects and loans to selected local banks, said the statement.
During their meeting, both sides agreed on the importance of reducing administrative burdens, improving access to finance, protecting property rights, developing skills and training capacities, ensuring corporate social responsibility, stabilising electricity supply and supporting the development of SMEs, officials said.
Michel Kempeneers, Asia Pacific director of Wallonia Foreign Trade and Investment Agency, who participated in the two-day business forum, told The Myanmar Times, “EU businesses are very interested in this forum and in investing in Myanmar. I believe there will be enough room for us. We are looking at many sectors to invest, but SMEs are likely to be the first.”
The task force statement also underlined the importance of ensuring the highest standards in measures aimed at countering money laundering and terrorist financing.
The two partners are going to work together to address the issues in the recent Financial Action Task Force report.
EU and Myanmar authorities also signed letters of intent for further investments in the SMEs, tourism and mining sectors and exchanged letters on cooperation for development.
A total of 600 people participated in the task force meetings, including more than 100 European investors and business people, on November 14 and 15 in Yangon and Nay Pyi Taw.
source: The Myanmar Times
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