MAB to provide SME loans without collateral
MYANMAR Apex Bank Ltd (MAB) will provide loans for SMES based only on the companies’ income and expenditure, senior MAB officials announced.
At an event to unveil the new financial product at the bank’s headquarters on Thein Phyu Road, Botahtaung Township, on Wednesday, bank officials said that the loans, which will not require collateral, will be made an interest rate of 8.5 percent.
“With technical assistance from German state-owned development bank KFW, our SME loans will be based on income and expenditure. There will be an easing of requirements for guarantees,” said U Kyaw Ni Khin, senior economic officer.
“MAB will be offering four types of loans based on working capital and fixed investment that will be beneficial for entrepreneurs”, said Mr Frank Mueller, team leader for banking advisory at German international consulting company International Project Consult (IPC).
Under the new offering, SMES can apply for a maximum of K100 million at the interest rate of 8.5 pc. The loans can be for up to one year for25 pc of a borrower’s working capital or up to five years for up 75 percent of a borrower’s fixed investment.
MAB also plans to offer bigger loans of up to K500 million at 13 pc interest for one year for working capital or three years for fixed investment, Mueller said.
MAB has already issued loans totaling K50billion to SMES, and this figure us projected to increase thanks to the new products.