Friday, April 28, 2017
The Myanmar Times
The Myanmar Times

Planning and Finance Ministry to take over MADB

Myanmar Agricultural Development Bank (MADB) will be taken over by the Ministry of Planning and Finance in April, due to difficulties faced by the bank in issuing loans expediently to farmers as well as collection of loan repayments, Deputy Minister U Hla Kyaw from Ministry of Agriculture, Livestock and Irrigation said at the Pyithu Hluttaw.

He said this was necessary as there were weaknesses in the laws governing the bank which made it difficult for the bank to operate efficiently.

MADB is currently under the purview of the Ministry of Agriculture, Livestock and Irrigation.

“There are requirements and weak points in the laws of Agricultural Development Bank. So, it will be transferred as of April 1 to the Ministry of Planning and Finance, which is the relevant ministry for this business,” U Hla Kyaw said on March 8.

“There are also plans to reform the bank’s processes,” he added.

Although MADB loans billions of kyat annually to small farmers across the country, it does not have sufficient capital and has to borrow from the Myanma Economic Bank (MEB) and Central Bank to meet the farmers’ loan needs. The process hinders the bank in giving loans to farmers in time for the rainy season.

The bank also faces problems in collecting loan repayments, which are necessary to repay its loan debts to MEB.

“According to the bank’s figures, from 2012 loans for rainy season paddy to 2015 loans for winter season crops, loans that farmers have not repaid come up to more than K 55 billion,” said U Hla Kyaw.

“Although the bank can take action under the Lands Act against the errant farmers, the process of issuing notices, warrants and putting up for auction the properties of farmers is a lengthy one, involving the court and administration departments.

“The bank has to analyse the processes involved. It waits as long as possible to collect loans from the farmers as it sympathises with the farmers’ difficulties. On the other hand, it is taking action against farmers who do not pay off loans,” he said.

U Hla Kyaw said MADB’s ability to repay loans to MEB depends on the farmers’ repayments, and if the bank is unable to do so within the specified period, MEB will deny further loans to MADB.

“That is why MADB has difficulties doing business,” he added. Moreover, he said, the bank is careful in taking action against farmers who do not repay loans.

The Pyidaungsu Hluttaw approved MADB’s loan of more than K1200 billion from MEB and K500 billion from Central Bank to issue loans to farmers this year. MADB needed the additional funds from the Central Bank as it has increased its loans to farmers this year to K150,000 per acre from K100,000 previously.


 

Translation by Win Thaw Tar