Myanmar government has announced that local businesses that are in CMP (garment and manufacturing) sector, hotel and tourism sector, and small and medium-sized enterprises owned by local businesspeople can now apply for loans from the COVID-19 fund set up by the state.
The total amount of the fund is 100 billion kyats (about US$72 million) and the businesses can apply for the loans from March 30 to April 9.
To qualify for a loan, businesses must have been licensed by the relevant departments before the end of March 2018; must have had an annual income for the past two years; and must be in sufficiently stable condition to repay the loan.
Businesses must be currently active, or their operations must not have been suspended for more than three months prior to the date of the announcement. Operations must be resumed immediately upon the loan being granted.
Moreover, businesses whether corporations or smaller companies, must not have been suspended or removed from the company register. The businesses must be on record as paying taxes, particularly income, commercial and special goods taxes according to the government.
Businesses that have contributed to the Social Security Fund will be prioritized.
Any business that fails to repay the loan will be dealt with in accordance with existing laws. In addition, such companies will receive negative credit ratings from the county’s credit bureau. This would make it difficult for them to obtain loans not only from banks, but also from non-bank financial institutions and the microfinance industry.
Since late January, the outbreak has hit Myanmar’s tourism, border trade and export sectors, causing massive losses for producers, exporters and workers. Airlines and hotels in the country have already suffered losses due to travel restrictions.