Small loans for rural, city folk
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People from rural and urban areas had to borrow loans at steep interest rates for their businesses and many were stuck in a poverty cycle, the president said in a conference on "Rural Development and Socio-economic Improvement" held in Mandalay yesterday.
The government was trying to reduce poverty – from 26 per cent of the people to 16 per cent by 2015, the president said.
The conference on micro-finance was arranged by the Ministry of Cooperatives. It has plans to borrow 5.5 billion kyat for rural and urban grassroots people and a further 364 million kyat for farm equipment that would be sold on instalment.
An eight-point rural development and poverty alleviation scheme has been in operation to try to bridge the development gap between urban and rural areas and promote national development and the work of cooperative groups to help boost national economic growth, the president said.
Microfinance loans by the Ministry of Cooperatives aims to booth people’s welfare in the immediate future and to help them stand on their own feet without needing to take out further loans for longer periods.
The ministry needed over 1 trillion kyat to implement the work and the government planned to open a microfinance bank and get loans, aid and grants from international sponsors, he said.
The ministry will lend 100,000 kyat per family and if they repay the loan in full when it comes due, the ministry will lend a further 500,000 kyat per family. People face a service rate of 2.5 kyat for 100,000 kyat to the ministry in addition to the capital, Cooperatives Minister Kyaw San said.
The ministry lent over 55 billion kyat to 1,770 cooperative societies in the Mandalay region, people at the event were told.
