Tue 20 Aug 2013
Filed under: Business / Trade,News,Regional
Lower House MP U Ye Htun told Mizzima on August 19 that the Chinese bank Exim has made an agreement to loan $100 Million USD to Myanmar. The import/export bank will loan the amount at an interest rate of 4.5 % per annum.
MP U Ye Htun said that the President sent a formal message to the Parliament regarding the loan. The message stated that the Myanmar Foreign Trade Bank would be the borrower and Ministry of Co-operatives would use the loan.
The message also informed that the loan has to be settled within 10 years including 2 years of suspension period. The loan will raise capital that is required in co-operatives societies and their members.
“The interest rate is reasonable but there is an issue as the borrower has to pay 1 % as management fees to the bank before they get the loan. The Myanmar Foreign Trade Bank has to pay it as the bank is the borrower. The Ministry of Finance will also have to act as the guarantor on behalf of the President to solve the issue”, said MP U Ye Htun.
“It is not always good to get loans. It should be mandatory for relevant Ministry Offices to systematically manage where to use these loans. A few decades ago we took out loans for Pyi Daw Thar Project (prosperity project) but the project failed. We need to think carefully since there are also additional fees like ‘management fees’ before they approve the loan, besides the interest”, said U Kyaw Sein, a Banking Professional and Economist regarding the Exim Bank loan.
The President sent a formal message to get suggestions and inputs from the Union Parliament in relation to the loans but the date for discussion has not been announced, yet.