It is the micro-, small-, and medium-sized enterprises that are at the forefront of the current transformation being witnessed in Myanmar.
Our MSMEs, including smallholder farmers, are among the drivers of the domestic economy. Not only are they crucial employment generators, they are also a source of national innovation, wealth creation, poverty reduction, and human empowerment.
We welcome the joint efforts of the Myanma Economic Bank and the Myanmar Agricultural Development Bank to provide more loans to farmers and agricultural entrepreneurs, apart from the current agricultural and agro machinery loans.
Their decision comes at a time when agri entrepreneurs are looking for more financing to invest in and expand their businesses.
With the use of the Japan International Cooperation Agency’s two-step loans, the Myanma Agricultural Development Bank has been disbursing loans to farmers at an 8.5-per-cent interest to help them procure agricultural machinery.
For the development of the agricultural sector, the MADB has also obtained a two-step loan of K200 billion from the Myanma Economic Bank to provide three- to five-year loans at 9-per-cent interest to farmers and agricultural entrepreneurs.
It is worth noting that the Ministry of Planning, Finance and Industry recently disclosed that it will roll out a risk-based loan scheme, which does not require physical collateral from smallholder farmers, as a pilot project at Pyimana Township in the Nay Pyi Taw Council Area.
Smallholder farmers frequently do not have physical collateral or other sources of income that can help then obtain loans.
Micro-finance institutions across the world are aware that financing farmers poses risks because farmer income is irregular and highly susceptible to environmental shocks, and many smallholder farmers have low incomes and low productivity.
However, we are confident that these risks can be mitigated. Providing smallholder farmers with credit to invest in their farms isn’t just a good measure, it can also be a good business opportunity. There are risks involved, but there are strategies that can be implemented to reduce risk and make farm finance a successful product for micro-finance institutions.
Only when MSME development helps create job opportunities in the agricultural sector can our overseas workers find decent jobs in our own land.
GNLM
