4.45 million EUR grant funds for SME promotionEnlarge image
On 24 October, H.E. U Maung Maung Win, Deputy Minister of the Ministry of Planning and Finance, U Kyaw Lynn, CB Bank Chief Executive Officer, as well as, Ms. Eva Schneider, KfW Country Director to Myanmar, signed the Financing and Separate Agreement for the SME Lending Programme (SELP). The signing ceremony was accompanied by H.E. the German Ambassador to Myanmar Mr. Weber-Lortsch, the German Development Counsellor Dr. Katharina Spiess and several stakeholders of Myanmar Government and the banking sector.
While dynamically developing the financial sector in Myanmar is still facing impediments. This includes a lack of resources for refinancing and institutional capacity constraints, which hamper the development of micro, small and medium sized enterprises (SMEs). Financial Cooperation thus aims to enable the formal banking sector to provide appropriate financing for SMEs. The German Government so far has committed EUR 15.3 million grant funds for SME promotion to the Myanmar Ministry of Planning and Finance. As the first participation bank CB Bank was selected – based on a financial sector study, and a due diligence analysis. Especially the first selected bank will serve as model since all sub-lending criteria developed so far will be used for future participating banks in the next programme phases.
The first phase of the SELP comprises of EUR 4.45 million grant funds which will be channeled by the Ministry of Planning and Finance as a loan to the CB Bank for refinancing SMEs and related consulting measures. The next phase of SELP with an envisaged volume of EUR 10.85 million will be based on a joint selection process by Ministry of Planning and Finance and KfW.
In his speech the German Ambassador emphasised that, “SME development is considered as one of the most viable means to create employment as well as sustainable economic development.” Having provided more than EUR 20.4 billion in loans to SMEs in Germany by the end of 2015, KfW is the biggest supporter of SME development in Germany and has a lot of experience and know-how in promoting the development of SMEs. KfW is keen to share this experience with Myanmar.