The outstanding balance of treasury loans issued by the government is increasing every year due to the failure of borrowers to make regular repayments, the Audit Office has said.
The Audit Office noted the issue among recommended reforms of state finances in a report released after auditing last year’s budget position report published by the Finance Ministry.
Treasury loans worth MVR 2.9 billion were issued as of August last year to state-owned enterprises (SOEs), cooperative societies and individuals, the report stated. However, as repayments have not been made regularly for these loans, the amount that was due and unpaid, including loan interest and penal interest, was MVR 3.7 billion by that date.
Unpaid treasury loans
- SOEs - MVR 1.5 billion
- Cooperative societies - MVR 2.1 billion
- Individuals - MVR 82.2 million
- Total - MVR 3.7 billion
Considering the arrears of government treasury loans, the largest amount was owed by the military’s cooperative society SIFCO. The second largest amount was owed by the police cooperative society POLCO. The MVR 2.1 billion owed by the two accounted for more than half of unpaid treasury loans.
After SIFCO and POLCO, the largest amount was owed by government companies. The list includes the largest government companies such as the Housing Development Corporation (HDC), State Trading Organisation (STO) and Maldives Airports Company Ltd (MACL). In addition, companies that depend on state funding such as the Public Service Media (PSM), Fenaka, Road Development Corporation (RDC), Maldives Integrated Tourism Development Corporation (MITDC) and Maldives Industrial Fisheries Company (MIFCO) as well as the dissolved Maldives Road Development Corporation (MRDC) were also included in the list.
Loans issued to individuals included unpaid amounts owed from two schemes carried out by the Fisheries Ministry as well as the “Atoll Electrification Project” and repayments owed for two loans issued to two members of the public.
The other notable issue from the report on the outstanding treasury loan balances was that the total arrears amount on the loans issued to cooperative societies and individuals was unclear. While the loan balances were known, the arrears were not clear from the loan records provided by the Finance Ministry, the report noted.
