Many Arakan State borrowers unable to repay government-provided loans 

17 Jan 2023

DMG Newsroom
17 January 2023, Sittwe

Many borrowers in Arakan State still can’t pay back loans provided as part of the Mya Sein Yaung (Emerald Green) loan provision program due to regional instability, director U Oo Chit Maung of the Arakan State Rural Development Department told DMG.

The program was launched in the 2014-15 fiscal year in Arakan State, providing loans for locals.  But many borrowers have defaulted due to regional instability triggered by fighting between the Myanmar military and Arakan Army that began in late 2018.

The arrears since late 2018 total more than K400 million, according to U Oo Chit Maung, who is responsible for loan distribution.

Borrowers in Ponnagyun, Kyauktaw, Mrauk-U, Minbya and Buthidaung townships have failed to repay K443.375 million, he said.

“It is mainly because they were displaced by the fighting and are taking shelter in displacement camps. We are negotiating with them to get back the money,” he said.

Loans were distributed to a total of 748 villages across Arakan State. Twelve out of 17 villages in Ponnagyun, Kyauktaw, Mrauk-U, Minbya and Buthidaung townships have yet to pay off their loans.

Clashes have not only displaced local residents but also disrupted their paddy harvest. And adverse weather patterns have also disrupted farming, making it difficult for them to repay their loans, said residents.

“You know things are getting harder these days. So, we have difficulties paying back the loans. But we will pay it back gradually,” U Maung Myint, a resident of Khaung Laung Village in Minbya Township, told DMG.

Apart from farmers, those who do casual jobs for a living also have difficulties repaying loans.

“We are displaced by the fighting. What’s worse, we have no jobs. In the past, we could earn K40,000 to K50,000 if we went to Sittwe and did casual jobs there. But it is difficult to find a job now in Sittwe. So, it is difficult to pay back our loans,” said U Wai Thein Aung from Tankho Village in Ponnagyun Township.

The loan program provides K300 million per unit (80 households and above in one unit), and the interest rate is K50 cent or K1.50 per K100. Half of the interest from loans are used for development of borrowers’ villages, according to the Arakan State Rural Development Department.