Myanmar’s Ministry of Industry signed an agreement to borrow US$20 million from a Singaporean private bank and $30 million from a Vietnamese state-owned bank so that it can increase government loans to small and medium enterprises (SMEs) a ministry official said.

Aye Aye Win, deputy director-general of the Small and Medium Enterprises Development Center, said a total of $50 million in capital had been secured by the ministry and would be loaned out through its Small and Medium Industrial Development Bank (SMIDB) next year.

“We signed a MoU in October. We’ll borrow 20 million US dollar from Singapore and the rest from Vietnam,” he said.Aye Aye Win said the funds would be borrowed from the overseas bank at a 4 percent interest rate, adding that loans will be made available to Burmese businesses at “between 6 percent and 8.5 percent, but we are considering the possibility of setting the interest rate at 6 percent.”

The government has been drafting a new SME Bill that was brought before Parliament earlier this year, but scant details have been made available about the bill. An estimated 88 percent of all businesses in Myanmar are small and medium sized enterprises.

The Japan International Cooperation Agency (JICA) is reportedly also cooperating with the government to help scale up government loans to SMEs in Myanmar. JICA plans to provide funds to this end through the Finance Ministry, but few details have been released about the plan.