The announcement of Loan disbursement condition for MEB MSME Loan
| Types of MSME Loan | -MEB MSME Loan from Public Deposit
-JICA (ODA) MSME Two-Step Loan |
| MEB MSME Loan | |
| Priorities sectors | Production, Manufacturing, Export promotion, Import substitution, Recycling and Energy Saving, Technical base production and servicing |
| Interest Rate
(1) immovable collateral (2) machinery collateral
(3) ease collateral |
-6.5% -between 8.5% to 11.5% (as per including machinery) -between 7% to 9% (as per credit rating) |
| Maximum Limit | 500 Million |
| Limitation for using loan | -maximum up to 20% of loan for initial working capital
-minimum up to 80% of loan for fixed capital |
| Acceptable types of collateral | Immoveable land and building, Credit Guarantee Insurance (CGI) of Myanma Insurance |
| Maturity | 3 years to 5 years |
| Repayment Plan | Interest for loan must be paid quarterly. Repayment schedules based on their loan tenure are as follows:
-For 3 years loan – 1 year for grace and repayment is 4 times within 2 years -For 4 years loan – 1 year and 6 months for grace and repayment is 5 times within 2 years and 6 months, -For 5 years loan – 2 years for grace and repayment is 6 times within 3 years |
| Notice for using Fixed Capital | Although fixed capital is allowed for building the factory, warehouse plants and machinery and commercial motor vehicles, it does not allow to purchase land (or) in any actions of changing the title of ownership. |
| Credit Guarantee Insurance (CGI) | MEB provides MSME loan with Credit Guarantee Insurance (CGI) issued by Myanma Insurance for the non-collaterals and less collaterals case. The MSME borrowers must pay not only the premium for CGI but also the interest of loan. The maximum amount for CGI case is allowed up to 20 million. Maturity for CGI case is allowed up to 3 years (1 year for grace and repayment is 4 time within 2 years). |
| JICA MSME Two-Step Loan | |
| Priorities sectors | Construction materials, Food processing, Chemical products, Plastic molding, Textile and Apparel, Other labor intensive industries, Rubber products, Tourism, Handicraft and Souvenir industry and Information Technology (IT) sector |
| Interest Rate
(1) Ordinary Loan (2) Related with Japanese Companies MSME Loan (3) Ease collateral MSME Loan |
-5.5% -5.5%
-between 6% to 10% (as per credit rating) |
| Maximum Limit | 500 Million |
| Limitation for using loan | -maximum up to 20% of loan for initial working capital
-minimum up to 80% of loan for fixed capital |
| Acceptable types of collateral | Immoveable land and building, Credit Guarantee Insurance (CGI) of Myanma Insurance |
| Maturity | 3 years to 5 years |
| Repayment Plan | Interest for loan must be paid quarterly. Repayment schedules based on their loan tenure are as follows:
-For 3 years loan – 1 year for grace and repayment is 4 times within 2 years -For 4 years loan – 1 year and 6 months for grace and repayment is 5 times within 2 years and 6 months, -For 5 years loan – 2 years for grace and repayment is 6 times within 3 years |
| Notice for using Fixed Capital | Although fixed capital is allowed for building the factory, warehouse plants and machinery and commercial motor vehicles, it does not allow to purchase land (or) in any actions of changing the title of ownership. |
| Credit Guarantee Insurance (CGI) | MEB provides MSME loan with Credit Guarantee Insurance (CGI) issued by Myanma Insurance for the non-collaterals and less collaterals case. The MSME borrowers must pay not only the premium for CGI but also the interest of loan. The maximum amount for CGI case is allowed up to 20 million. Maturity for CGI case is allowed up to 3 years (1 year for grace and repayment is 4 time within 2 years). |
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The necessary documents for MSME Loan (Short List) 1. Application letter, purpose of using loan, repayment schedule 2. Business Plan 3. Title of collateral (Form 105/106, Land Contract, Instruments of Free hold land, LaNa 39 etc.) 4. MSME member card / recommendation letter from Department of Industrial Supervision and Inspection. Recommendation letter of concerned community for business and residency 5. Business valid License and Tax Receipts 6. Financial Statement for three fiscal years/ Statements for expansion and contraction of business 7. License Photo, National Registration Card, Household Schedule of entrepreneur 8. Photos of Collateral Buildings (front, left, right, back and inside), location map 9. Lists of current using machinery in business and photos for business operation using with these machinery 10. Lists of machinery that will be bought as fixed capital with sample photos 11. If the MSME loan is applied for building of warehouse, factory, go down etc., they need to submit the following documents to the bank: (a) Sketch for Bill of Quantities and Layout Plan of building (b) Title of land area where the building built in 12. If the business is company, they need to submit the following documents to the bank; (a) Company Registration Form from DICA, lists of Directors (b) List of shareholders (c) The agreement of Board of Directors meeting for getting loan 13. Recommendation of Environmental Clearance from Ministry of Natural Resources and Environmental Conservation ( require for the concern business only)
Housing Finance Development Project – Myanma Economic Bank (MEB) is providing Housing loan funded by JICA (ODA) loan through the Participating Financial Institutions (PFI) towards low and middle income households since the fiscal year 2018-2019. – Project Management Unit has been organized with members of MEB and Department of Urban and Housing Development (DUHD) under Ministry of Construction (MOC). MEB is responsible for management of the project as the Executing Agency (EA). _ In the 1st batch of project, PMU selected Construction, Housing & Infrastructure Development Bank (CHIDB) as the only one PFI and PMU will select another Financial Institutions as the PFIs in the next batch. – So, CHIDB is providing the housing loans towards low and middle income households who buy the housing built by DUHD under MOC. – The end-borrowers can search the information of the housing built by DUHD and can choose the Housing that they want to buy in the MOC Website http://www.ministry-construction.gov.mm/. – PMU has already lent to (1502) end-borrowers with the loan amount MMK 13108.93 million through CHIDB in March 2020.
The Requirements for Housing Loans Application (a) Applicant – Must be over 18 years old Myanmar citizen who does not own the house (b) Sale price of housing unit – MMK 10 million to 27 million for low cost housing – MMK 27 million to 64 million for affordable housing (c) Maximum Loan Amount – MMK 55 million (d) Monthly Income of a Household – At least MMK 0.3 to 0.5 million for low cost housing – At least MMK 0.5 to 1.0 million for affordable housing (e) Amount of Loans – Maximum 70% of the building value (f) Down Payment – At least 30% of the building value by customer (g) Interest Rate (per annum) – Minimum deposits interest rate + 0.5 % = 5.5 % (h) Maturity – At least (15) years (i) Repayment Schedule – Principal and interest will be paid monthly with amortization method
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