doing business in myanmar – what you need to know as a singaporean
Farmers who owe some K200 billion to state-owned Myanmar Agriculture Development Bank (MADB) have not repaid their debts since 2012, according to bank records.
Most of the farmers are from Ayeyarwaddy, Bago and Yangon.
“These farmers need to pay what they owe to the bank. Currently, our situation is such that savings levels have fallen to a low whereas our loan book is at a high,” said Daw Nilar Shwe, a director from MADB. MADB holds K77 billion in deposits. In comparison, it lent a total of K1.7 trillion in fiscal 2018-19.
Among the reasons given for the lack of repayments is farmers are prioritising other lenders with higher interest rates compared to MADB’s lending rate of 8 percent. Meanwhile, volatile weather conditions have made it difficult for farmers to maintain stable levels of quality and yield, which has resulted in income fluctuations over the years.
There is also a lack of manpower to work the fields as younger generations of workers opt for opportunities to work abroad instead, said Daw Nilar Shwe. U Thein Aung, chair of the Farmers Development Association added that costs have been rising even though crop prices have been volatile. “Our incomes are low and insufficient to cover the costs of feeding our families and ensuring our children get an education. Many farmers simply do not have the funds to pay back,” he said.
MADB had already extended the deadline for farmers to repay loans taken in October in December last year to September from June previously.
Meanwhile, borrowers are taking out larger sums from the bank. Loans for individual rice growers was risen to K150,000 from K100,000 per loan in 2016, while for farmers of other crops, the loan amount was doubled to K100,000 last year. Loans are available for a total of 22 kinds of crops.
In the past, farmers could only take out winter loans after the monsoon loan was fully paid, but since last year, MADB changed the scheme to allow winter loans although the monsoon loans have not yet been repaid.
MADB provides loans for farmers based on the three main planting seasons in the country – monsoon, pre-monsoon, and winter.
Source : The Myanmar Times
To see the original article click link here
