The Financial Regulatory Department under the Ministry of Planning, Finance and Industry is drafting a Credit Guarantee Corporation Law which aims to support the provision of financing for micro, small, and medium enterprises (MSMEs) by enabling the establishment of a Credit Guarantee Corporation to guarantee credit to such companies. It will also allow participating financial institutions to spread the credit risks and provide loans without collateral.
“Whether collateral is provided or not, the state-backed Credit Guarantee Corporation can function as an intermediary organization between the borrower and the lender. The Credit Guarantee Corporation on behalf of the borrower will give a guarantee to the lender for a loan. The borrower then pays a specified premium rate to the Credit Guarantee Corporation” said, U Thant Sin, director of the department.