Myanmar Agricultural Development Bank : Initial Assessment and Restructuring Options | Land Portal

Resource information

Date of publication: 
April 2014
Resource Language: 
ISBN / Resource ID: 
oai:openknowledge.worldbank.org:10986/17782
Copyright details: 
CC BY 3.0 IGO

Myanmar is an agricultural country. It
is estimated that the agriculture sector represents between
35 to 40 percent of gross domestic product (GDP) and that up
to 70 percent of the labor force (of 32.5 million) is
directly or indirectly engaged in agricultural activities or
depend on agriculture for their income. Given
agriculture's important contribution to the economy,
the modernization of the agriculture sector is a top
priority in the economic and social development agenda of
the Government of Myanmar. Among the government institutions
supporting the agriculture sector, the Myanmar Agriculture
Development Bank (MADB) plays an important role. MADB was
established in June 1953 by the Government of Myanmar to
support the development of agriculture, livestock, and rural
enterprises in Myanmar. MADB is currently the largest
financial institution serving the rural areas and financing
agriculture activities. At the end of 2012, MADB served 1.87
million customers, mostly farmers, and had a network of 206
branches (which accounted for 23 percent of all banks'
branches in Myanmar). Since its creation, MADB has played an
important economic and social role by providing loans to a
large segment of low-income households engaged in
agricultural activities. Historically, several agriculture
banks around the world have failed due to poor corporate
governance, inadequate risk management capability,
unsustainable business models, capture by their own
clientele, or undue political interference in their lending
decisions. Therefore, authorities should ensure that MADB is
transformed into a sound, well-administered, and financially
sustainable institution, able to withstand undue political
interference and able to operate with the highest standards
of corporate governance and transparency. In this context,
the report is organized as follows: chapter one gives
diagnostic of MADB; chapter two presents options for the
transformation of MADB; chapter three presents lessons from
international experience; and chapter four gives conclusions.

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