On 4 June, VisionFund will launch its latest short film, Threads. This video will take us to the dusty streets of Mandalay in Myanmar, to meet Myint Myint and her son, Paing. Before we share Threads, below is a note from Itzbeth Menjivar, VisionFund Development Director, describing the microfinance landscape in Myanmar…
Myanmar, also known as Burma, and affectionately called the Golden Land, is the kind of place that you read about in National Geographic, or if you are an international relations fan like me, in geopolitical news sources. Filled with gorgeous and sparkling pagodas, monks in maroon robes and incredibly kind and soft-spoken people, Myanmar truly feels foreign and exotic.
Having returned to democracy only in the past couple of years, Myanmar is undergoing an intense period of transition: from autocratic to democratic rule, from conflict to peace, from a command economy to a market economy. Myanmar is changing from an insular and closed society, to one open to new people and experiences. It is moving from need and scarcity to opportunity for prosperity.
The transitional nature of the country is not what struck me, what most impressed me was the deep spirituality of so many. During a hike to the pagoda on top of Mandalay Hill, prayers and chants were palpable in the air, as was the scent of wet sandalwood trees, adding a scent very familiar to the incense and myrrh used in Roman Catholic services, creating an immediate connection for me.
Myanmar has a population of more than 54 million, 60% of which make a living through agricultural activities, most of them farming small plots of land, using old, manual techniques. Scythes are used to harvest rice fields, water buffaloes pull wooden ploughs and carts pulled by oxen carry products to market. One of the major constraints to agricultural productivity is lack of access to financial services.
It is estimated that less than three million people have access to finance, either through the Myanmar Agricultural Development Bank (MADB) or through microfinance institutions. Historically there have been limited credit products available and terms that leave farmers needing to borrow from informal money lenders in order to plant their lands and repay their loans, often also needing to use their land as collateral. With the opening of the economy, microfinance institutions are coming in to fill a very important gap towards financial inclusion.
World Vision began providing small loans through its development programmes in 1998. When microfinance regulation was passed in November 2011, VisionFund Myanmar could be founded as an official microfinance institution, and is now the second largest MFI in the country and one of the few with an adequate financial services provider license, including for deposit-taking, so it can accept savings from clients.
The transitional nature of Myanmar’s economy and growth opens up a world of opportunities for micro-entrepreneurs, who are taking advantage of the government’s investments in infrastructure. On an interview with the BBC World Service recently, Aung San Suu Kyi, Myanmar’s de-facto leader, said that job creation was a priority for the government and added that “if the government focused on investing on roads and electrification, people would create their own jobs,” and indeed this is what is happening.
Micro-entrepreneurs, many of them smallholder farmers, not only generate income for their families, but also create jobs for others in their communities. VisionFund Myanmar currently supports just over 120,000 clients with small loans to start or grow their businesses, 90% of them women working hard to improve the wellbeing of more than 200,000 children. However, their work does not stop there. In addition to providing credit to micro-enterprises, VisionFund Myanmar provides insurance for clients, helping to protect them from unexpected shocks, disasters and illnesses. It is also piloting innovative “express loans” meant to support clients who need short-term cash flow to cope with immediate requirements. This can range from business liquidity, to urgent healthcare, and sadly even victims of human trafficking.
While VisionFund Myanmar has nearly doubled its size in the past year, the potential for growth, demand for its services and opportunity to lift millions out of poverty is huge. According to UN statistics, 70 per cent of the adult population is financially excluded or informally served. The need in Myanmar is immense, but the potential of its gentle, determined, spiritual people is greater.
Over the next month, VisionFund will be sharing stories of its clients in Myanmar, and I hope you will be as inspired as I was. To discuss how you can join us in serving, please contact me: email@example.com