fbpx

Businesses jumpy over impending loan repayment deadline

Some of Myanmar’s business leaders are urging those of their compatriots who have been slow in repaying their loans to do so in order to avoid a financial crisis.

There has been speculation that banks would be suing businesses that have not been repaying their loans on a regular basis or have defaulted to pay up by the end of September or the properties that have been put up for collateral would be confiscated.

Zay Kabar Co Ltd chair U Khin Shwe said at the launch ceremony for the Myanmar Entrepreneurs Association on August 22 that the target deadline for debt repayment has been set for the end of September, with prosecution and property confiscations to ensue if businesses persist in not repaying.

“All banks will sue unless loans are paid back by the end of September. There are some 10,000 people on the list, with some being top business people who may be blacklisted,” he said, adding that nearly all businesses take loans by putting up their properties as collateral.

Myanmar Construction Entrepreneurs Association secretaryU MyoMyint said there could be a serious banking crisis if these businesses do not repay their loans.

“The majority of the loans come from private sector banks and there could be some issues from large loans issued by private banks,” he said.

So far, no official announcement has come from the Central Bank of Myanmar or from any of the banks. “It would be better for the any announcement to be delayed and for the repayment schedule to be pushed back as the situation can become chaotic,” U MyoMyint said.

Meanwhile, U Khin Shwe, also patron of the Small and Medium Industrial Development Bank Ltd, said banks could lose money if they start confiscating properties as property prices have for the most part been in a slump compared to four to six years ago.

U Myo Myint and U Khin Shwe both said that a delay in the repayment schedules should be discussed as the amounts owed could destabilize the banking industry. Taw Win Family Co Ltd chair U Ko Ko Htwe said the slowing economy has prevented businesses to repay their debt while banks have now mostly issued loans to companies with solid credit.

“Banks may not benefit if move to collect their debts next month. Bankers understand it as well, and they are also running a business,” he said.

U Ko Ko Htwe said both lenders and debtors must come to terms with a more flexible repayment schedule in order for the problems to be solved.

Source: Myanmar Times

To see the original article click link here

NB: The best way to find information on this website is to key in your search terms into the Search Box in the top right corner of this web page. E.g. of search terms would be “property research report”, ”condominium law”, “Puma Energy”, “MOGE”, “yangon new town”,”MECTEL”, “hydropower”, etc.

.

Looking for foreign investors to invest in your business in Myanmar