MCEF to set up lending programme for construction sector
The Myanmar Construction Entrepreneurs Federation (MCEF) is planning to set up a loan programme for members who are in need of capital to start projects.
MCEF chair U Shein Win said the central executive committee (CEC) of the organisation decided on the loan programme because small and medium construction firms were finding it difficult to raise the 30 percent minimum capital needed to start projects won through government tenders.
The country’s construction sector has been in a slump since 2015 with the property subsector struggling to absorb the oversupply, especially for high-end condominiums.
The MCEF will start this programme in the Yangon, Sagaing and Ayeyarwady regions. MCEF general secretary U MyoMyint said the organization would place its own assets as temporary collateral with CHID Bank and would be the guarantor as well as loan provider for its members.
He said the organisation was still planning out the details but reckons that the programme would be rolled out in the next two months.
U MyoMyint added that the maximum amount of the loan would be capped at 30pc of the asset value and the interest would be 3pc more than banks, with the maximum loan term being one year. The interest collected would be placed into a Federation Fund.The standard rate for loans to businesses is currently set at 13pc.
Requirements to get the loan include being a member of the MCEF for at least six months, document showing a successful government tender, recommendations from CEC members and applicants’ track record.
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