The Central Bank of Myanmar (CBM) has permitted local banks to restructure and reschedule existing loan repayments to help their clients, CBM Deputy Governor U Soe Min, told.

While the economic impact of the COVID-19 pandemic has yet to be quantified, it is expected that businesses will bear the brunt of a decline in demand for products and services. The CBM anticipates that the impact on small and medium-sized enterprises (SMEs) will be the most severe.

As such, allowing businesses with healthy repayment track records to defer repaying their outstanding loans should provide them with some reprieve and help many maintain business operations, U Soe Min said.

KBZ Bank is among the local banks that has launched schemes to help borrowers. Last week, it announced the COVID-19 Credit Assistance Program for SMEs to provide urgent financial relief to its SME customers. Under the program, SMEs can apply for extensions of current overdraft and term loans, deferrals on principal loans and interest and recapitalise principal loans and interest for a period of up to six months.

“By using their current cash flow for business operations instead of servicing loans, SMEs will have a better chance to stay afloat and recover during this critical period,” U Zaw Lin Aung, Senior Managing Director of KBZ Bank, said in a statement.

Other banks, including Yoma Bank, CB Bank and uab Bank have also launched similar schemes allowing customers to defer their loans and interest repayments.