August 19, 2016

P&F Ministry seeks parliamentary approval for $100m loan from World Bank


THE Ministry of Planning and Finance explained the government request to take a US$100 million interest-free loan from the World Bank for the financial sector development in Myanmar during a Pyidaungsu Hluttaw session yesterday.
Deputy Minister U Maung Maung Win said that the loan would be spent on the country’s banking sector development, upgrading of infrastructure of financial institutions and helping people access financial services.
He pointed out that only 30 per cent of Myanmar’s adults have access to formal financial services and the country has limitations in the financial services including availability of loans for poverty alleviation in rural areas and agriculture sector
Financial sector development in Myanmar would help the country improve its economic performance and develop a market-based competitive banking sector, thereby contributing towards ensuring economic stability and sustainability and inclusive financial services.
Under the terms and conditions, the interest-free loan has a 38-year term with payments deferred for six years. A service fee which is equal to 0.75 per cent of the loan amount is charged once a year.
$75 million of the loan will be disbursed to The Ministry of Planning and Finance and the remaining$25 million to the Central Bank of Myanmar.
The deputy minister told the Parliament that the ministry would set $60 million as a budget support for civil servants’ salaries, expenditures, allowances and pensions and use $7 million for reforms in State-owned banks, $5 million for upgrading the microfinance sector and insurance services and installation of IT system and $3 million for capacity-building programmes for the ministry’s staff.
According to the deputy minister, the $60 million loan will be disbursed over a four-year period with the first $20 million tranche of the $60 million loan in 2017, the second $15 million tranche of the loan in 2018, the third $10 million tranche of the loan in 2019 and the fourth $15 million tranche of the loan in 2020.
Vice-Governor of the Central Bank of Myanmar Daw Khin Saw Oo said that the CMB proposed to spend $6 million on supporting banking sector development and opening a training school of monetary studies, $2 million on IT system and human resources development and developing financial management program, $15 million on improving the payment system and $2 million on training programmes for the CBM’s staff.  During yesterday’s Pyidaungsu Hluttaw session, Deputy Minister U Maung Maung Win also submitted a draft law revising the income tax law to the parliament and the Speaker of the Pyidaungsu Hluttaw announced that the President nominated U Bo Bo Nge as a member of the Board of Directors of the Central Bank of Myanmar.


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