Banks skim money from Burmese farmers

(DVB)–The Burmese government’s agricultural bank is skimming money from agricultural loans for farmers and using it in their own loan sharking ventures, say the opposition National League for Democracy party.

The government’s central bank offers farmers monthly loans of 10,000 kyat ($US10) per acre of farmland through local town-level agricultural banks.

A member of the Farmer’s Committee of the National League for Democracy (NLD) said that an agricultural bank in Rangoon division’s Htantabin town is pocketing a portion of each loan.

“The bank is cutting 250 kyat out of every 10,000 kyat loan we get for our farms,” said Maung Maung Kyi.

Htantabin townhsip has about 1200 acres of farmland, while nearby Phyuu township has about 1600 acres.

“In total, they gain about 30 million Kyat profit from all the farmlands in the township,” he said, adding that other townships were being subject to the scheme.

According to Maung Maung Kyi, the bank had also been limiting farmers from receiving loans for more than 10 acres of farmland per person.

A source close to the agricultural bank in Bago division’s Nyaung Lay Pin said that bank officials are keeping the rest of the money for their own use.

Normally, agricultural loans are provided by the government’s central bank in accordance with the amount of farmland owned by the farmer.

According to the source, local agricultural banks are setting arbitrary limitations on loans to farmers, and pocketing money from loans to those with more than 10 acres.

“For example; if there are ten farmers in a village and they own 15 acres each, then the bank officials can skim 500,000 from the extra acres exceeding the 10 acre limit,” said the source.

Loans provided by the government come with very small interest and so officials “can play loan sharking [with more interest] with the money they skim”, said the source, before they have to return it to the government at the end of harvesting season.

He also said that officials from Bago’s agricultural bank, working together with local village authorities, are forcing farmers to buy fertilizer from them with a elevated price if they want to receive the loan.

The agricultural banks in Rangoon and Bago divisions were unavailable for comments.

Reporting by Ahunt Phone Myat