Zaykabar Khin Shwe said that top business tycoons and businesses would be in trouble if the banks asked them to pay back loans that they lent to businessmen and construction companies by the end of September.
Myanmar Entrepreneurs Association patron Zaykabar Khin Shwe told Mizzima, “The banks gave a deadline to businessmen for repayment of loans at the end of September and warned them that they would be prosecuted and their properties would be attached if they could not repay these loans by that deadline. Many businessmen in Myanmar borrowed money from the banks. Some of them gave their real estate as collateral to these loans.”
Regarding this matter, the chairman and patron of Myanmar Entrepreneurs’ Association will reportedly meet Central Bank officials and they will discuss the decline of real estates’ prices and falling prices of land which is typically given as collateral to their loans taken from banks.
“As the nature of banks, all of them are connected with the businesses and businessmen. In international arena too all businesses borrowed money from banks for their businesses. The situation is even worse in our country is building condominiums on their land. They borrowed money from banks for building these condominiums as they did not have enough money in their hands by giving these condominiums and land as the collateral to their loans. If we have to pay back all these loans by the end of September and all loan defaulters would be prosecuted by that time, all the banks have to prosecute all these businessmen. The number of these would-be loan defaulters is about 10,000. They will be top business tycoons in our country. In this situation most of these people will be in trouble,” Khin Shwe added.
Khin Shwe added that construction industry took the lion’s share of these bank loans by presenting their construction projects to banks for taking loans.
Myanmar Construction Entrepreneurs Association general secretary Myo Min said, “There will be repercussions among us if it goes this way. Generally speaking there will be huge impact on the economy if there is head-on collision between banks and entrepreneurs.”
According to the press statement issued by Central Bank for the period of January to September 2018, the domestic banks lent 394.6 billion kyats to agriculture and livestock sector, 3,153.1 billion kyats to construction sector, 963.4 billion kyats to SME (Small and Medium Enterprises) sector, 6,792.9 billion kyats to trading sector, and 2662.1 billion kyats to services sector. The total amount of these bank loans is 23,775.9 billion kyats for the total of ten sectors.