Fewer Mon State Farmers Taking Rainy Season Loans From Bank
Farmers attribute the change to a shift in policy that requires them to provide banks with the original document proving farm ownership.
By NETWORK MEDIA GROUP (NMG)
Tuesday, August 21, 2018
More Mon State farmers say they are unable to obtain rainy season loans from the state branch of the Myanmar Agricultural Development Bank this year because they cannot provide original document proving farm ownership, they told NMG.
U Tun Kyi, who owns 20 acres of rice paddies, said that in previous years farmers were allowed to provide a copy of what is known as Form-7, but due to a change in policy, the original became a requirement to obtain the funds in 2018. However, many farmers had already used the original slip as collateral to obtain other loans.
“That’s why some people have faced problems: because they already took a loan from other sources by giving their original Form-7 slip. So they couldn’t get a loan from the bank,” he told NMG.
According to the Myanmar Agricultural Development Bank’s Mawlamyine branch, the bank made loans available from mid-May until mid-July, at an 8 percent interest rate. The bank had reportedly planned to provide loans to 39,000 farmers throughout Mon State, but ended up lending money to 1,000 fewer people than expected.
U Kyaw Swar Hlaing, manager of the Myanmar Agricultural Development Bank in Mon State, told NMG that the bank ended up 1.7 percent short of their target, and that it could be attributed to three main factors.
“First, farmers already took loans from other sources by giving their original Form-7 slip. Second, farmers were able to get more money from other sources than from the farming bank. Third, farmers traveled abroad to find work,” he explained.
According to its 2018 budget, the bank had planned to lend 43 billion kyats (US$28.1 million) to farmers for more than 290,000 acres of farmland. The bank has already lent more than 42 billion kyats ($27.5 million) to farmers with more than 280,000 acres in total.
Farmers must return 10 percent of the loan in December, 60 percent in January, 10 percent in February, and 20 percent in March.
During the 2017 rainy season, the bank lent more than 43 billion kyats to farmers with a total of more than 300,000 acres of farmland. According to the Myanmar Farming Development Bank’s Mon State branch, the farmers were all able to pay back their loans on time.