Sustainable financing of SMEs

completed

Decades of repressive financial sector policy and a banking crisis in 2003 have led to a significant weakening of the financial system in Myanmar. The formal banking system is therefore very small. The consequences are minimal outreach (customer reach), weak financial institutions, a rudimentary range of products and underfinancing of the SME sector. This is offset by high demand. The aim of the project is to support the formal banking sector in Myanmar in providing small and medium-sized enterprises (SMEs) with sustainable and needs-based financing. The FC grant of EUR 3.3 million will support an established local bank, Co-Operative Bank Ltd. (CB Bank), which was identified as part of a feasibility study and due diligence, in professionalizing its business operations as the first pilot bank under the project and expanding its SME lending. In addition, EUR 2 million is earmarked as an accompanying measure to expand the capacity of CB Bank and other future implementation partners. The design of the measure will be implemented in close cooperation with the TC measure for bank promotion and financial system development. Based on a common module objective and a common TC/TC indicator, close cooperation is planned with regard to the development of the SME business area at CB Bank and joint training activities for the financial sector in Myanmar.