Tuesday, May 21, 2024
HomeNewsArchivesUS$300 million loan approved for rural development

US$300 million loan approved for rural development

The Burmese parliament has approved a proposed loan of US$300 million from EXIM Bank of China to fund the Cooperative Ministry’s micro-financing projects.

Minister of Cooperatives Kyaw Hsan pledged to parliament that the loan will not be a burden on the country, and said that the Cooperative Ministry was committed to the loan’s repayment – though he did not specify a deadline.

The micro-financing projects – with loans between K100,000 (US$100) to K500,000 (US$500) – will not be available to all citizens in Burma. Minister Kyaw Hsan adds that a selection process will determine candidates’ eligibility according to “necessity”.

The programme is aimed at reducing the poverty level to 16 percent and improving the lives of the rural poor.

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However, National League for Democracy MP Khin San Hlaing cautions that the good intentions of the grassroots may be undermined, as loans are not the ideal solution.

Singapore-based Institute of Southeast Asian Studies (ISEAS) published an assessment last year that was discouraging about Burma’s proclivity for cooperative credit as a means of rural development, warning that repayment debt and loan interest will ultimately burden Burma’s farmers, small enterprise proprietors and workers.

The report suggested that Burma needs a functioning financial system for genuine transformational growth and development.

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