Yangon, Myanmar, 12 June 2020 – With the economic fallout from COVID-19 impacting small and medium-sized enterprises (SMEs) across Myanmar, KBZ Bank has introduced the COVID-19 Credit Assistance Program for SMEs to provide urgent financial relief to its existing and new SME customers. Under the program, which was launched on 11 June 2020, SMEs can apply for the following financing options, or ‘credit assistance’, to ease the financial burden they face during this challenging period:
- Six-month extension of current Overdraft and Term Loans;
- Six-month deferral on Principal Loans and Interest; and
- Capitalization on Principal Loans and Interest for up to six months.
These recovery financing options apply to Term, Overdraft, or JICA SME Two-Step loans obtained at KBZ Bank’s SME Banking Department. The program will give SMEs breathing room to manage loan repayments at a later time, so they can prioritise efforts to maintain business operations, attain financial recovery and continue contributing to the country’s overall economic development.
“For Myanmar’s small business owners of the country, the COVID-19 pandemic has become more than a health crisis. Many SMEs have been impacted financially after being forced to close their doors temporarily, and this has also affected employees and their families. In line with the goals of the Myanmar government and the Central Bank of Myanmar, KBZ Bank has introduced the COVID-19 Credit Assistance Program for SMEs to help SME customers improve their monetary health. By using their current cash flow for business operations instead of servicing loans, SMEs will have a better bigger chance to stay afloat and recover during this critical period. Our KBZ SME Banking team will continue to work tirelessly in support of SMEs in Myanmar,” says U Zaw Lin Aung, Senior Managing Director of KBZ Bank.
The COVID-19 Credit Assistance Program for SMEs is aligned with the Myanmar government’s COVID-19 Economic Relief Plan (CERP). Under point 2.1.6 of the CERP, the Central Bank of Myanmar has permitted banks to restructure and reschedule existing loans extended to MSMEs that regularly pay interest and principal on a timely basis for a longer period1.
With more than 90 percent of businesses in Myanmar classified as small and medium-sized enterprises, the Myanmar government has recognized that SMEs are the main driver for the country’s future national economic development2. While the economic impact of the COVID-19 pandemic has yet to be quantified, it is expected that businesses, including SMEs, will bear the brunt of a reduction in demand for their products and services. The impact on SMEs will be severe, particularly because of higher levels of vulnerability and lower resilience related to their size.
To qualify for the COVID-19 Credit Assistance Program for SMEs, existing customers should be using KBZ SME Loan Services for at least two years, engage KBZ Bank as their principal bank and have a positive repayment history as of February 2020. For new customers, KBZ Bank will assess the applicant’s industry and business, with greater priority given to SMEs providing services and products that support COVID-19 prevention, containment and relief efforts in the country. All applicants will be required to submit company documentation and an emergency business plan.
To apply or find out more about the program, SME businesses can contact their Relationship Manager at KBZ Bank’s SME Banking Department, or get in touch with the team via phone: +951373785 / +951372979 / +951372977 / +951377716 or email: [email protected].
1Myanmar Ministry of Information, 27 April 2020, Overcoming as One: COVID-19 Economic Relief Plan
2The Global New Light of Myanmar, 4 April 2019, SMEs are integral to the economic growth of Myanmar