Burmese Central Bank gives green light to offer consumer loans Skip to main content

Burmese Central Bank gives green light to offer consumer loans

Chiang Mai (Mizzima) – The Burmese Central Bank has given a green light for banks to begin offering installment loans under a “hire-purchase system” to private citizens in cooperation with commercial companies and banks.

An official from the Central Bank in Naypyitaw told Mizzima: “The central bank has informed all state-owned banks and private banks that they can now do hire-purchase loans if they wish to do so.” The advisory was sent to all state-owned and private banks on September 15.
The new Central Bank of Burma in Naypyitaw. Photo: popularmyanmar.com
The new Central Bank of Burma in Naypyitaw. Photo: popularmyanmar.com

Banks that want to participate in loans, known as “installment loans” in the West, must provide information from the companies, the agreement signed by customers and the terms and conditions between a customer and the bank. After checking the documents, the central bank would authorize a bank to make the loan, said an official of the Central Bank.

Ye Min Oo, an official at the Asia Green Development Bank, a private bank, said the bank would try to offer the service to its customers by the end of October.

In the installment-loan system, a bank must pay the price of a commodity as down payment to the sales company on behalf of the buyer and then the buyer must pay the price of the commodity in installments to the bank. The bank will charge the customer an interest rate based on the amount of down payment, said bank official Ye Min Oo.

“Under this system, it will be different from the interest rate for a bank loan. For instance, for a bank loan the interest rate is 15 per cent, but the rate for a high-purchase loan will be different. We are still calculating this rate,” said Ye Min Oo.

The banks will be provided a guarantee for the payment by either an employer of the buyer or the sales company.

“This system is needed for the country. We will use the secure-guarantee system,” said Ye Min Oo. He said a bank would not incur losses under this system.

Commodities that may be purchased include furniture, home electrical appliances, electronic products, computers and other items.

The private Kanbawza Bank was still awaiting the central bank’s directive, said bank official Aung Kyaw Myo.

Finance and Revenue Minister Hla Tun told Parliament in late August that the government was consulting the Union Attorney General on amending the Burma Central Bank Law and Burma Financial Institutions Law in order to update them according to current needs.

Ten years ago, hire-purchase loans were provided by the now-defunct Asia Wealth Bank and Myanmar May Flower Bank. The central bank banned the service after 2003.



Popular posts from this blog

Chronology of the Press in Burma

1836 – 1846 * During this period the first English-language newspaper was launched under British-ruled Tenasserim, southern  Burma . The first ethnic Karen-language and Burmese-language newspapers also appear in this period.     March 3, 1836 —The first English-language newspaper,  The Maulmain Chronicle , appears in the city of Moulmein in British-ruled Tenasserim. The paper, first published by a British official named E.A. Blundell, continued up until the 1950s. September 1842 —Tavoy’s  Hsa-tu-gaw  (the  Morning Star ), a monthly publication in the Karen-language of  Sgaw ,  is established by the Baptist mission. It is the first ethnic language newspaper. Circulation reached about three hundred until its publication ceased in 1849. January 1843 —The Baptist mission publishes a monthly newspaper, the Christian  Dhamma  Thadinsa  (the  Religious Herald ), in Moulmein. Supposedly the first Burmese-language newspaper, it continued up until the first year of the second Angl

Thai penis whitening trend raises eyebrows

Image copyright LELUXHOSPITAL Image caption Authorities warn the procedure could be quite painful A supposed trend of penis whitening has captivated Thailand in recent days and left it asking if the country's beauty industry is taking things too far. Skin whitening is nothing new in many Asian countries, where darker skin is often associated with outdoor labour, therefore, being poorer. But even so, when a clip of a clinic's latest intriguing procedure was posted online, it quickly went viral. Thailand's health ministry has since issued a warning over the procedure. The BBC Thai service spoke to one patient who had undergone the treatment, who told them: "I wanted to feel more confident in my swimming briefs". The 30-year-old said his first session of several was two months ago, and he had since seen a definite change in the shade. 'What for?' The original Facebook post from the clinic offering the treatment, which uses lasers to break do

Myanmar Villagers Tell of 150 Homes Burned in Deadly Army Air Attacks

Artillery fire and aerial bombardments by Myanmar forces killed three civilians and burned scores of houses in their communities in mid-March amid fighting between Myanmar forces and the rebel Arakan Army in war-ravaged Rakhine state, villagers recounted Monday at a press conference. Villagers from Kyauktaw township in western Myanmar's Rakhine state discuss the government military's attacks on their communities at press conference in Sittwe, March 30, 2020. They made the comments after traveling from in Kyauktaw township to the state capital Sittwe to give testimony on a series of attacks on civilian dwellings amid a government-imposed internet shutdown in nine townships in Rakhine and neighboring Chin state, cutting off vital information about the fighting. They villagers accused the Myanmar Army of conducting an aerial bombing on civilian communities that destroyed about 150 homes and a monastery in Pyaing Taing village, while government soldiers on the g