The Auditor General’s Office has said that the number of defaulters on Treasury loans is increasing year on year.

The Office highlighted the issue in its audit of last year’s budget position report released by the Ministry of Finance.

As of August last year, MVR 2.9 billion had been disbursed as treasury loans to state-owned enterprises (SOEs), cooperative societies, and the public. However, these loans have not been repaid regularly and the interest rate penalty alone amounts to MVR 3.7 billion, the agency’s data revealed.

The total outstanding amount of MVR 3.7 billion included; MVR 1.5 billion by SOEs, MVR 2.1 billion by Cooperative Societies, and MVR 82.2 million by the public.

The Army’s Cooperative Society (SIFCO) along with the Police’s Cooperative Society (POLCO) has the largest outstanding with a combined total of MVR 2.1 billion owed — this accounts for more than half of the unrecovered outstanding from treasury loans.

Following the cooperative societies, the largest outstanding loans are by SOEs; including the Housing Development Corporation (HDC), State Trading Organization (STO) and Maldives Airports Company Limited (MACL). Other companies with outstanding loans include state-funded companies such as Public Service Media (PSM), Fenaka Corporation, Road Development Corporation (RDC), Maldives Integrated Tourism Development Corporation (MITDC), Maldives Industrial Fisheries Company (MIFCO) and the now defunct Maldives Road Development Corporation Ltd (MRDC).

Loans to the public include those outstanding from two schemes run by the Fisheries Ministry, outstanding for the Atoll Electrification Project and two loans issued to two separate individuals.

The report noted that, while the amount of loans to cooperative societies and private individuals were known, the amount in arrears was not, explaining that exact amounts could not be confirmed from the records provided by the Ministry of Finance.