THE meeting included Vice President U Myint Swe, Union Ministers, and Chief Minister of Yangon Region U Phyo Min Thein after they had conducted monthly meetings with private businesses to discuss the challenges faced.

“We will be assisting businesses in the agriculture and construction sectors as well as the SMEs by providing them with capital funds to develop their operations. The Union government will directly lend a hand by providing loans. Billions can be extended,” said U Kyaw Win.

Notably, the loans will also be extended to businesses along the supply chain. In the agriculture sector currently, only farmers are eligible for loans by the Myanmar Agricultural Development Bank (MADB). But the new plan will allow businesses to take loans for crop cultivation, the purchase of machinery, processing and diversifying into new export markets.

In the construction sector, businesses will be given access to working capital during periods of cash flow difficulties, he said. The loans will be provided by the MADB and Construction and Housing Development Bank (CHDB) through the Myanma Economic Bank (MEB).

Meanwhile, financial assistance will also be given to SMEs involved in ethnic cultural and traditional works, household works and regional product services. However, priorities will be given to those involved in the business of replacing imported products with domestically produced alternatives, U Kyaw Win said.

Development bank

But local banks also face liquidity problems. As such, U Kyaw Win said an adequately capitalised development bank backed by MEB will be established to disseminate the loans. “We have already discussed the setting up of a development bank with the Central Bank of Myanmar,” he said.

Currently, agricultural loan are given by the MADB while constructions loans are given by the CHDB. Meanwhile, the SME sector typically receives financial assistance by the Small and Medium Industrial Development Bank as well as several other private banks.

The move to provide easier access to capital comes after months of discussions with local SMEs regarding the challenges they face doing business in Myanmar.

“There are many requirements to doing business including acquiring techniques and equipment. It is important that we have enough capital for this. The major problem for locally-owned businesses is the lack of capital to expand,” said U Thaung Win, member of the Myanmar Rice Federation.

For more details : https://www.mmtimes.com/news/agriculture-construction-smes-receive-loans-under-new-union-plan.html