KULOB, October 17, 2009, Asia-Plus — The next postponement of last year’s government credit repayments will not solve the problem, the head of Tajprombank’s branch in Kulob Y. Saburov said in an interview with Asia-Plus, commenting on intention of banks to ask the government to again postpone repayment of last year’s government credit and freeze the interest on loans for banks. The farmers’ loans are currently due by November 1, 2009
In 2008, the government gave a 140 million somoni credit to cotton farmers through six banks. The loans were supposed to be paid off by April 1, 2009.
In March this year, Agroinvestbonk appealed to the government, asking to postpone debt repayments for cotton farmers until the end of the year. Agroinvestbonk justified its request for postponement of debt repayments by saying that the fall in the international price of cotton and in demand for the product has hurt many Tajik farmers.
The government agreed to extend the debt repayment term until November 1, 2009. Banks now intend to ask the government to postpone debt repayments for farmers until July 1, 2010.
Saburov considers that if debt repayments are postponed again “farming units will just stop repaying debts, hoping for write-off of debt that has become traditional.”
According to him, there ought not to extend the debt repayment term but to “freeze the situation, without relieving banks and farmers of responsibility.”
“If the remainder of the government credit is withdrawn from banks’ accounts on November 1 they will be affected significantly, but if to again postpone the debt repayments farmers will just stop paying off their debts,” Saburov said.
He noted that analysis of the farmers’ loan repayment situation showed that borrowers had interpreted government’s decision to postpone the debt repayments for them until November 1 as a sign of that they may repay nothing till October 31. “Farmers will act in such manner if the debt repayments are postponed until July 1, 2010,” Saburov stated.
As far as Tajprombank’s branch in Kulob itself is concerned, it provided 3,513,376 somoni, including a 1,845,316 somoni government credit, in loans to cotton farmers in the Kulob zone for last year’s cotton-harvesting campaign. Of this amount, 2,067,909 somoni were provided to farming units in the Hamadoni district that have repaid only 9 percent of that amount so far.
Last year, a 5 million somoni government credit was given to cotton farmers through Tajprombank and the bank has repaid little more than 50 percent of the government credit to this date.
