COVID-19 loan applicants in Arakan spike for second round of lending

By Myo Thiri Kyaw 14 Aug 2020

Myo Thiri Kyaw | DMG
14 August, Sittwe

The number of applicants in Arakan State for a second round of low-interest government loans to businesses affected by COVID-19 has risen nearly sixfold compared with the first batch of applicants, according to the Arakan State Chambers of Commerce and Industry.

There were 50 applicants when the COVID-19 loans were granted for the first time earlier this year, with applicants for the second round of lending rising to 289 in the state, the business group said.

U Tin Aung Oo, chair of the Arakan State Chambers of Commerce and Industry, said the surge in applicants could be attributed to the second batch of loans targeting enterprises in the agricultural and livestock trades, which together make up the largest sector in Arakan State. The first round of loans primarily went to the hotels and tourism industry and garment manufacturing businesses, he explained.

“There are some businesses that are halted because of COVID-19 pandemic. The plan to grant loans to enterprises is good for business people. Loans should be granted to other sectors in the third and fourth batches because other businesses are also suffering the impacts of the pandemic,” he said.

“Business people from other sectors should prepare their tax receipts and list of income and expenditures for their business,” he added.

U Aung Aung, a businessman involved in the import-export sector in Sittwe and related border trade matters, said he applied for the loan to help get his business up and running again as commerce has slumped due to COVID-19.

“We need to spend the loan from the government effectively. We need to make sure the loan is spent to operate our business again. The interest rate is so low,” U Aung Aung said.

At the national level, a committee to remedy economic impacts caused by the pandemic allocated K100 billion (US$73.5 million) for low-interest loans in the first round of lending in April. The one-year loans were granted at an interest rate of just 1%.

In accordance with a resolution passed at a meeting of the committee in June, the Ministry of Planning and Finance on July 3 announced that another K100 billion would be disbursed as a second batch of loans, with businesses able to apply for a loan between July 29 and August 10.