Technical Assistance Consultant’s Report

This consultant’s report does not necessarily reflect the views of ADB or the Government concerned, and ADB and the Government cannot be held liable for its contents.

Project Number: 48206-001 Regional—Capacity Development Technical Assistance (R-CDTA)June 2018

Promoting Gender Equality and Women’s Empowerment (Phase 2)—Future Cities, Future Women Initiative

Prepared by

Emerging Markets Consulting

Phnom Penh, Cambodia

For the Asian Development Bank

CURRENCY EQUIVALENTS

(as of 1 May 2018)

Currency Unit – kyat (MMK) MMK1.00 = $0.000752

$1.00 = MMK1,330.50

NOTE{S}

In this report, "$" refers to United States dollars.

Mandalay – Financial Services Institutions Review Prepared For: ADB Future Cities, Future Women (FCFW)

Date: 5 June 2018

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Abbreviations

ACCU Association of Credit Cooperatives

ADB Asian Development Bank

Alliance Alliance for Microfinance in Myanmar

ASEAN Association of Southeast Asian Nations

Advans Advans Microfinance Myanmar

BRAC Building Resources Across Communities

CBM Central Bank of Myanmar

CO Credit Officer

EFA Expanding Financial Access

FCFW Future Cities Future Women Initiative

FCP Future Cities Program

FDI Foreign Direct Investment

FRD Financial Regulatory Department

GDP Gross Domestic Product

GNI Gross National Income

HQ Head Quarters

IFC International Finance Corporation

IMF International Monetary Fund

INGO International Non Governmental Organisation

LIFT Livelihoods and Food Security Trust Fund

L-IFT Myanmar Low Income Financial Transformation

MF Micro Finance

MFI Micro Finance Institute

MMFA Myanmar Micro Finance Association

MOPF Ministry of Planning and Finance

MSME Micro Small & Medium Enterprises

MUSIP Mandalay Urban Services Improvement Project

NGO Non Governmental Organisation

PGMF Pact Global Microfinance Fund (INGOs)

TOR Terms of Reference

UNCDF UN Capital Development Fund

UNDP United Nations Development Program

USAID US Agency for International Development

VF Vision Fund Myanmar Co., Ltd

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Contents 1. Background and Methodology.............................................................................................................. 6

1.1 Future Cities, Future Women ........................................................................................................ 6

1.2 Objective and Purpose of the assignment .................................................................................... 6

1.3 Methodology ................................................................................................................................. 7

1.4 Data Collection ............................................................................................................................. 7

2. Myanmar ............................................................................................................................................... 8

2.1 Recent history, demographics, economic, key industries, ........................................................... 8

2.2 Mandalay ...................................................................................................................................... 9

3. Financial services in Myanmar .............................................................................................................. 9

3.1 Regulations.................................................................................................................................... 9

3.2 Industry size and composition, target market, service characteristics,...................................... 10

3.3 Formal micro finance products ................................................................................................... 13

3.4 Informal financial services .......................................................................................................... 15

3.5 Mobile money ............................................................................................................................. 16

3.6 Serving the ultra poor ................................................................................................................. 17

3.7 Development Partners involved in financial inclusion, ............................................................... 18

4. Financial services in Mandalay ............................................................................................................ 20

4.1 Supply side of Financial Services in Mandalay ............................................................................ 20

4.1.1 Relevant service providers in Mandalay - MFIs, ................................................................. 20

4.2 Demand side for financial services in Mandalay......................................................................... 25

4.2.1 Challenges with micro finance schemes, according to micro finance clients ..................... 26

4.2.2 Potential women target groups .......................................................................................... 27

5. Evaluation of potential "financial inclusion" partners for FCFW ........................................................ 28

5.1 Evaluation criteria ....................................................................................................................... 28

5.2 Selection ...................................................................................................................................... 28

Annex 1: Annexes to the TOR ..................................................................................................................... 32

Annex 2: List with all MFIs in Mandalay REGION ........................................................................................ 34

Annex 3: List with interviewed MFIs (34) in Mandalay ............................................................................... 36

Annex 4: Description of the Women organisations involved with FCFW (translated) ............................... 40

Annex 5: Myanmar Country Brief, UNCDF 2018 ......................................................................................... 44

Annex 6: Myanmar Financial Inclusion overview, UNCDF 2018 ................................................................. 45

Annex 7: BRAC fact sheet 2017 ................................................................................................................... 46

Annex 8: BRAC graduation model ............................................................................................................... 48

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Annex 9: Other Financial developments ..................................................................................................... 51

Annex 10: WAVE pricing ............................................................................................................................. 52

Annex 11: Summary tables of the Interviews with women and small businesses ..................................... 53

Table 1 System 1 - informal saving group ................................................................................................... 15 Table 2 System 2 informal savings group ................................................................................................... 15

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Executive Summary This report was commissioned by the Future Cities, Future Women Initiative (FCFW) a gender–targeted ADB regional technical assistance program. The aim of the report is to provide an overview of the financial services sector in Mandalay (city) to provide services to women interested in producing handicrafts or products made from waste and recycled goods, and to identify potential partners. The focus was particularly on finance for ‘poor to ultra-poor’ women in Mandalay city (around Thingazar creek). On the demand side the research identified two particular target groups and their needs for access to finance. Target group 1 being - (ultra) poor women (garbage collectors on the street - freelance), with no assets, no official home address, no paperwork, no business activity and no regular income, and other poor women that are not yet involved in income generating activities or micro business. Target group 2 being - poor women with an ongoing existing income source (small business). Both groups need access to finance (to start a business or to expand a business), the different groups might need different repayment schedules and have different payment capacity. On the supply side, the research identified that Target group 1 is a very risky target group for Micro Finance Institutions (MFIs (repayment capacity is not certain) and there are no MFIs that work with this target group in the city, due to the risks involved. There are some MFIs that allow (ultra) poor and non-secure clients to enter ‘saving and loan’ schemes but these MFIs are concentrated in rural areas where they also engage in village development alongside the increasing the financial capacity of the target group. There are no MFIs that provide loans to people who want to start up a business. For Target group 2 however, there are an abundant number of MFIs operational in Mandalay city and serving female clients, with which the target group could be linked to. This target group is the most common client of MFIs; poor women with a small business that need business loans. There is not much variation in the type of loan products available as maximum loan sizes and maximum interest rates are regulated by law. For both target groups, an informal money lender is always an option to access finance as well and this option is being used for loans that are very large or not in the service offering of formal institutions; the interest rate is higher but there are no restrictions imposed on the client in general. In particular for Target group 1, the ultra poor informal (often migrant) workers, there is a need for a scheme whereby people with no asset and with no regular income, could be supported financially. In other countries “graduation models” have been implemented. Whereby the client is supported with increasing their assets (through a grant for a cow or sewing machine etc.), training to increase their financial literacy and life skills and supported with saving groups, whereby the clients, after 2 years, graduates to become a regular MFI group loan client. This type of scheme is not available in Myanmar, but BRAC Myanmar are interested in developing this for Myanmar as they operate this type of scheme in other countries already. For Target group 2, there are ample options in Mandalay city, for business loans. Both loan products for education, emergencies, education etc as well as saving products are still very limited with MFIs, while respondent women (very tiny sample) indicated that they needed loans for many other things than business. It is recommended to support in the development of a graduation (scheme) program for the ultra-poor in the growing cities, as they are not being served.

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1. Background and Methodology

1.1 Future Cities, Future Women The Future Cities, Future Women Initiative (FCFW) is a gender–targeted ADB regional technical assistance program to identify and support key triggers that would accelerate women’s participation in urban governance and economic development. FCFW focuses initially in two cities: Mandalay in Myanmar, Tblisi in Georgia, and with plans to add a third city in Indonesia. The focus in each city will be different and will depend on the context and developments in each one. FCFW will be aligned closely to other ADB-funded activities in the cities. In Mandalay, ADB works closely with the Mandalay City Development Committee to support improvement of basic services – specifically water supply, wastewater, and solid waste management. Recognizing the significant role of women in solid waste management: collection, waste separation, and recycling, this was identified as a focus for the FCFW activities in Mandalay. Preliminary work was undertaken to document the role of women in solid waste management and recycling, and to undertake market research on the supply and demand sides of handicraft industry using recycled products.

1.2 Objective and Purpose of the assignment Following the background work and a workshop in Mandalay in November 2017 with various stakeholders, options were put forward for piloting activities to empower women in solid waste management and recycling. The team also recognises that access to financial services would need to be a key element of the activities although this could not be provided under a grant-funded project. If a project is to move forward into design phase, potential partners that can provide this service will need to be identified. The objective of this current assignment is to provide an overview of the financial services sector in Mandalay that provides services to women interested in producing handicrafts or products made from waste and recycled goods, and to identify potential partners. The kind of financial services that might meet the needs of potential project beneficiaries would include loans, savings, financial literacy training etc. The demand for financial services would come from the potential beneficiaries of a future pilot. The groups identified for a FCFW project are: 1. Women in the wards targeted by the 'Community based solid waste management program1', either

members of the target households, or waste collectors and separators working in the area. 2. Individual entrepreneurs that might be interested in starting a small business on commercial basis

(for example Chu Chu in Yangon); 3. Women civil society organisations that are starting to broaden out their work with poor women, or

young women, and who might be interested in starting this as a way to support their target groups with small income generating activities.

The suppliers of financial services, targeted for this study, are local and international NGOs supplying micro finance in Myanmar, International micro finance companies with a Myanmar presence (and registration), and Myanmar finance companies.

1 A program funded by the Urban Climate Change Resilience Trust Fund will commence in 2018 in several wards in Mandalay around the Thingazar Creek.

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1.3 Methodology The Methodology used for this research consists of desk research and Key Informant Interviews (KI interviews)/discussions in Mandalay, and in Yangon – where most of the financial service providers have their headquarters. Both the demand for financial services as well as the supply of financial services has been identified, within the context of this research. The research questions were:

What financial services providers are operating in Mandalay city and in Mandalay region, and what types of services are they providing to whom?

What are the financial needs of women with small businesses in Mandalay?

Which financial services providers in Mandalay are open to further discussions to link up with the future FCFW program?

1.4 Data Collection There are 176 microfinance service providers in Myanmar, 56 MFIs are mentioned on the list provided by the Myanmar Micro Finance Association (MMFA) and compiled by the Finance Regulator Department (FRD) as operating in Mandalay Region, of which 45 also in Mandalay City (11 are only in the region operational). Mandalay city was the focus area of the research and not the whole Mandalay region)2. Of the 56 in Mandalay region, 18 are international (INGO / Private), 38 local (NGO / Private). A number of these MFIs on the list, are either not yet operating in Mandalay yet or have ceased to operate there. All of the 56 were part of the desk research and when we found contact details (by desk research and from here say in the field) they were contacted by phone, for details of products and criteria of loan and saving products. We intended to contact all because some of the data on the list was not completely reliable.

A full list of all the MFIs in Mandalay is given in Annex 2, and Annex 3 provides a list of the 34 MFIs in Mandalay City that were interviewed for this research. In Annex 2, all the yellow coloured MFIs have not been contacted because contact details could not be obtained (23 in total). Annex 3 gives an overview of the information gathered from the rest, 33 interviewed.

Based on their size and scale, their product portfolio, and the capability to do capacity development, five MFIs were selected for further discussions. Two of these: Alliance for Microfinance in Myanmar (Alliance) and Advans Microfinance Myanmar (Advans) have their Myanmar country office in Mandalay; and three others have their Myanmar country offices in Yangon: Vision Fund (VF), Pact Global Microfinance Fund (PGMF) and BRAC Myanmar.

A few international providers have websites/annual reports detailing their loan and saving products but most do not. The Myanmar providers are less likely to have information published anywhere.

The MFI research identified the demand for financial services among women with small businesses, through one on one key informant interviews

Interviews with 20 women working in the handicraft sector in Mandalay such as home handicraft producers, handicraft sellers and some women with generic small business, who would provide a good representation of the potential target group.

EMC Cambodia interviewed 3 Cambodian handicraft enterprises that have been active for many years and that have access to micro finance.

2 The Myanmar Micro Finance Association was able to provide a list, for the whole country, with the names of registered financial service

providers per State / Region, for 2017. The list was translated to English and the team set out to interview as many of the service providers on the list as possible.

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Interviews with Chu Chu (a producer of handicrafts made from recycled materials) and Hla Day (a marketing and capacity development organisation for Handicraft producers) who provided feedback on the need for finance for their business as well as for their employees and handicraft producers that supply them.

Some relevant data from a project called "What Women Want" a research project implemented by a research company (L-IFT Myanmar) that implements a yearlong research into 800 MFI clients with small businesses and their financial needs. Some findings of this research (taking place in 2 urban and 2 rural areas) are included in the report in the section around the needs of women with small businesses.

Topics that were discussed, with all key informants, ranged from: the types of businesses, the finance needs (amounts, timings, etc) and the repayment possibilities from a business's perspective, as well as the different goals such as social, schooling or emergency loans. The more traditional approach to finance (when there is no MFI), through a money lender, or through an informal saving group were also discussed.

2. Myanmar

2.1 Recent history, demographics, economic, key industries, Myanmar is a lower middle income country and one of the faster growing ones in the East Asia and Pacific region, although growth is hampered by a slow peace process and a large refugee crisis in different parts of the country which is also possibly playing a part in the slowing down of the Foreign Direct Investment (FDI) projects entering the country. The gross national income (GNI) per capita of $1,455 in 2017, with a Gross Domestic Product (GDP) growth rate for 2016/2017 of 6.4 % which is expected to be similar in 2017/2018. The main sectors driving the GDP are services, industry and agriculture .3 China and Singapore are the largest contributors of foreign investment, mainly in the oil & gas and power sector4. A recent Myanmar-World Bank joint poverty analysis5 in Myanmar found that poverty has almost halved in ten years, from 44.5% in 2004 to 26.1% in 2015. However, poverty remains substantial, especially in rural areas where people rely on agricultural and casual employment for their livelihoods. Those who live close to or on the poverty line, are very susceptible to economic shocks. Among Association of Southeast Asian Nations (ASEAN) countries, Myanmar has the lowest life expectancy and the second-highest rate of infant and child mortality. Out of every 100 children, 6.2 die before their first birthday and 7.2 before their fifth6. In terms of nutrition, 29% of children under 5 are moderately stunted and 8% are severely stunted7. The school dropout rate is high, especially in rural areas where 6 out of 10 children who start grade one dropout before the end of middle school and even higher among the poorest families.

3 IMF, Reuters, Myanmar Business Today (9 April 2018 VOL 6 issue 15). As Myanmar Economy Rebounds, Risks of Sanctions

Gives some investors pause. Myanmar 4 Directorate of Investment and Company Administration, Ministry of National Planning Economic Development (2017). Foreign

Investment of Existing Enterprises (By Sector). Myanmar. 5 Ministry of Planning and Finance, & World Bank. (2017). An Analysis of Poverty in Myanmar: Part One – Trends between

2004/5 and 2015. Yangon. 6 Ministry of Planning and Finance, & UNFPA (2014) Myanmar Population and Housing Census 7 Ministry of health and Sports (2015). Demographic and Health Survey

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Myanmar is one of the world’s most disaster-prone countries exposed to multiple hazards, including floods, cyclones, earthquakes, landslides, and droughts, ranking 2nd out of 187 countries in the 2016 Global Climate Risk Index and 9th out of 191 countries in the INFORM Index for Risk Management."8 While most of the country is slowly moving up, the telecommunication sector (since 2014) has grown dramatically and is probably the fastest growing sector. From very limited connectivity, due to exorbitant SIM card and internet prices, to a mobile subscription rate (across the population) of 93% with 25% of adults having access to internet, since 20149.

2.2 Mandalay Mandalay is the capital of Mandalay Region and the cultural, educational and economic hub of upper Myanmar. It has a population of 1.25 million people and it contributes around 8% to the GDP of the country. The population growth of the city is around 10% per annum, which is higher than in the rest of the nations' cities10 The Myanmar Times (2017), quoting data released from the Mandalay Region Investment Committee, mentioned that Mandalay region is set to achieve its target of US$ 600 million foreign direct investment (FDI) for 2017-18. China is the top investor with investments of over US$ 400 million11.

3. Financial services in Myanmar The financial sector of Myanmar is made up of the Central Bank of Myanmar (CBM), the Ministry of Planning and Finance (MOPF), state owned banks, private banks, finance companies, foreign bank branches and representative offices of foreign banks and micro finance providers. Prior to 2011, the year in which the Micro Finance Law was established, the micro finance sector was dominated by the UNDP-PACT program (this program, about 20 years later became the PGMF), the main micro finance program in the country. Since 2011, numerous other micro finance institutions (MFI) have been established in the country.

3.1 Regulations The main law governing the Micro Finance sector is the 2011 Myanmar Micro Finance law, it stipulates12: - interest caps on loans and savings, limitations on where MFIs could borrow (locals could only borrow locally and foreign MFIs could only borrow outside of the country) (now obsolete), there were criteria linked to % of urban versus rural clients (now obsolete). It stipulated that 5% of a loan had to be saved by the borrowers prior to releasing a loan (now obsolete) and it regulates the types of approvals, from the Supervisory Committee, needed for all kinds of actions by MFIs, such as:

8 http://www.worldbank.org/en/country/myanmar/overview. Last updated: April 2018

9 UNCDF (2018). Myanmar Country Brief (Annex 5)

10 Transaction Technical Assistance (TRTA), ADB (July 2017). Myanmar: Preparing the Second Mandalay Urban Services

Improvement Project Co-financed by Urban Climate Change Resilience Trust Fund under the Urban Financing Partnership, Facility, Project Number: 50109-001. 11 Myanmar Times (25 Jul 2017). Mandalay likely to hit US$600 million FDI target for 2017-18. 12

UNCDF, Myanmar, Funding Challenges for Microfinance sector in Myanmar, Eleonora Gatti, Nov 2015

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Extending microcredit / accepting deposits / carrying out remittances services / carrying out insurance business / borrowing from locally and abroad / carrying out other financial activities. For a number of these activities approval has been extremely difficult to get.

Other details of the law indicate:

Interest rate cap on microfinance loans at 30% pa, on declining balance

Interest on savings deposits is 15% pa minimum

Max loan size per year is $5000/year (no more than 1 loan per household)

Loans cannot be issued to buy luxury items

MFIs can apply mobile payment systems (except remittances from local and abroad)

Local MFIs can only borrow from the Myanmar Economic Bank (state bank)

To access grant and debt financing the MFI needs approval from the Financial Regulatory Department (FRD)

To access debt financing MFIs need approval from the Central Bank of Myanmar

The initial Law also mentioned that each MFI needed to comply with 50:50 rural urban clients ratio, but the choice of target population is now up to the MFI.

And the initial Law also mentioned that local based foreign MFI could only borrow from formal financial institutions outside the country, not exceeding debt ratio of 5:1 and not exceeding $3 million, but these stipulations have also been removed in 2017.

The MMFA (representing more than 150 MFIs) developed a white paper (2016) with requests from the sector to the government in order to make the micro finance regulations less prohibitive (a number of their requests have been accepted in 2017), other rules might be loosened up in the near future. The Myanmar Micro Finance Association (MMFA), has been lobbying for change on behalf of its members.

3.2 Industry size and composition, target market, service characteristics,

The MMFA newsletter, publicised micro finance sector data, in March 201813 (for the first time). It showed in its data that there are 176 microfinance service providers in Myanmar at the end of 2017; down from 256 in 2015 (a change in regulations meant that credit cooperatives had to reregister to receive a microfinance license, and not all of them did. The data also indicated an enormous growth in the number of micro finance clients, from 1.6 million (in 2015) to 3 million in 2017. The vast majority of licensed MFIs consist of local MFIs (107 out of 176), many were initially credit cooperatives and are small, member owned groupings with their own funds only, in general. The second largest group are foreign companies, 39 of the 176, with foreign funds and a much larger outreach compared to the local companies which are limited to the geographical area of the members.

13

MMFA (March 2018), Newsletter

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Figure 1 Licensed MFIs by Type

Source: MMFA (March 2018). Newsletter

Mandalay Region has the second largest cluster of MFIs operations in Myanmar, Mandalay City is also the second largest city in the country, so that makes sense as initial regulations also stipulated urban clients and not only rural clients. Figure 2 Number of MFIs operating by State/Region

Source: MMFA (March 2018). Newsletter

Most loans are distributed in Yangon region, with Ayeyarwaddy being second and Mandalay and Magwe a combined third place. Figure 3 Distribution of Clients and Loan Portfolio by State / Region

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Source: MMFA (March 2018). Newsletter

The UNCDF Myanmar fact sheet (2018), indicating the state of financial inclusion, mentioned that fifty two percent of businesses identified ‘access to finance’ as an obstacle; only seven percent of small businesses have a credit line or a loan.14 In the three figures below, specific details along the male female divide can be found. In general, access to finance (figure 4) is low, with around 40% of men and women excluded from bank, formal non bank and even informal finance. Women have more slightly more access to informal finance, compared to bank and formal non bank. The access to credit figure (also figure 4) indicates that more than half of the respondents do not borrow money (equal for men and women), and slightly more women access credit through informal pathways. While figure 5 shows that more than sixty percent of the people do not save money, while 31% of the population save informally, either at home or within a saving group.

14

UNCDF, Myanmar fact sheet 2018

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Figure 4 Access to Finance and Access to Credit

Source: MMFA (March 2018). Newsletter Figure 5 Access to Saving

Source: MMFA (March 2018). Newsletter

Large portions of the population do not have access to finance and credit, while on the other hand, in certain areas where access is easier for example in Yangon outlying industrial areas, large portions of the population 70-80% are “over indebted”. To cope people have to take out other (new) loans or they sell possessions15.

3.3 Formal micro finance products The MFI industry is limited in the type of products it is able to offer clients, due to restrictive regulations. The following micro finance services and products can be found; Loans and savings. Loans - (group and Individual) of which most are generic loans for the purpose of doing business. Only a few larger MFIs have been able to diversify their product offers and adapted to the target groups needs for education loans or agricultural loans or loans specifically to hire to own agricultural machinery (in an infant state). Other products such as saving, and insurances are only just starting to come on the market, in pilots. Savings (under MFIs) that have happened so far were compulsory savings before receiving a loan (also part of the microfinance law). Savings can still only be deposited at commercial

15

https://www.mmtimes.com/lifestyle/22554-debt-trap-another-hurdle-for-urban-poor.html, Catherine Trautwein 16 Sep 2016

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banks. Digital payments and digital loans are however starting to take off, see 4.2.3. Figure 6 provides an overview of the characteristics of the micro finance products available in Myanmar. Figure 6 Micro Finance products

Characteristics of the Loans (in general)

Group Loans Individual Loans

A group is formed of between 3-15 (or 20) clients (generally women)

The group members generally know each other and are functioning as a "social guarantee for each other", (if one member runs away with the money the rest pay off the debt).

Generally these groups start with some compulsory savings, a % of the future loan, this helps the groups get into a group meeting and payment discipline and a credit officer will be able to connect to the group, and it is stipulated by the law (5% of the loan needs to be saved).

When enough savings has taken place, the clients get a loan (after they have fulfilled the necessary paperwork such as copies of NRC, house ownership, photo, for some recommendations from authorities or others a general an agreement of the spouse, sometimes also recommendations from neighbours), these criteria differ per provider.

Generally loan amount are around 100,000 kyat as a first loan going up to 1,000,000 kyat per member.

Repayment is generally bi-weekly or monthly, principle and interest (generally 2.5% monthly of a non-declining balance).

Group members gather to do the repayments together.

Often clients graduate from a group loan to an individual loan, which would have given the MFI the opportunity to assess the repayment discipline of the client as well as the business.

Most clients again save a certain percentage of the loan, after which they receive the loan.

Individual Loans are generally for business expansions and are larger amounts

The same paperwork criteria such as copies of NRC, house ownership, photo, for some recommendations from authorities or others a general an agreement of the spouse etc are needed.

Generally loan amount start at 500,000 kyat and can go up to 5,000,000 kyat per loan (there is a legal limit of $5000 per client).

Repayment is generally bi-weekly or monthly, principle and interest (generally 2.5% monthly on a non-declining balance).

Individual members generally make repayments at the branch office.

Savings, the regulation on savings is lagging behind and only a few MFIs have received licenses to collect deposits. The saving products are limited to fixed term deposits and "normal" saving accounts with interest rates between 10-15% per annum depending on the account type.

A few organisations also offer a type of insurance (or more assurance products), whereby a small % of a loan is deposited into an account as a contribution to a "safety net or welfare fund" for cases of health emergencies or death of clients. Other insurances such as for crops are in very early stages and not relevant.

Digital payments and digital loans - The prevailing method of dealing with money, in the whole country, is still very much in "cash", people can be seen to carry large quantities along the streets. However, digital money is, due to the enormous penetration of smart phones and SIM cards in the country, making a strong appearance and very potential for the ease of use. The number of digital money

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operators is growing rapidly, with Wave as one of the most visible one (see 4.2.3) in the country.

3.4 Informal financial services The most common informal borrowing is from family and friends, most people have used this at some point in their live. In Myanmar the “money lender” would be the next largest informal money provider. These people are from the community and they know the people in the community. There are generally no formal requirements that need to be fulfilled, the moneylender has their own ways of making sure that their investment is secure and will be repaid with a high interest rate. Su jay is the Myanmar name for an informal group that operates as a rotating savings group and is typically found in ‘commercial’ rural areas. There are two systems that were identified during the interviews on behalf of the project, there could be more, whereby funds are received and redistributed and are described as a saving method. Both systems can be found a lot in markets and sometimes the monthly amounts go up to 100,000. 1. System 1 The first system identified is a straight forward one, whereby a group gets together and decides how long they will organize this "Su Jay" and how much they will put into the "Su Jay pot" on a weekly base for the duration of their Su Jay. After that it is decided who will get the different “pots” of money in which week, this is generally done through a lottery system. Everybody gets the same amount of money. Generally the one who starts the Su Jay group gets the first weeks money, as they generally need money. Table 1 System 1 - informal saving group

Source: project interviews

2. System 2 The second method is more complicated and remarkable that people can follow it, considering a low financial literacy. It starts with a pledge to pay a certain amount monthly for a certain number of months. After which the group leader “wins” the full amount for the first month (see Table 2 System 2 informal savings group shows the difficult set up). Table 2 System 2 informal savings group

paid into pot per week

week 1 week 2 week 3 week 4 week 5

person 1 10,000 10,000 10,000 10,000 10,000

person 2 10,000 10,000 10,000 10,000 10,000

person 3 10,000 10,000 10,000 10,000 10,000

person 4 10,000 10,000 10,000 10,000 10,000

person 5 10,000 10,000 10,000 10,000 10,000

50,000 50,000 50,000 50,000 50,000

lottery tickets on who gets first second third, fourth and fifth, etc.

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Source: project interviews

The second month everybody makes a bid declaring how much they would like to take out, the group decides on which bid to choose (the person who received the money the previous month, has to pay the full amount, for example 10 after which a calculation happens, of the bid 46 – 10 (of the leader) = 36/9 members left -> then the rest only pay 4 each that month, saving 6 per person (or not giving out 6 per person). This continues till all the months have passed. The leader (is most in need of cash) pays most into the "pot" and the number 10 person who is not in need and was hanging in there, pays the least for the amount they take home. Person 1 (leader) pays 10*10=100, while person 9 pays 40.5 over the course of the "Save" and receives 90 for that. This system was described as more of a gambling game, for the participants. The ‘starter’ of the group has the advantage of getting the money instantly but generally also pays the most for this privilege.

3.5 Mobile money Micro Finance and Mobile Money - Possibly the fastest changes within the micro finance industry are to be expected from the micro finance linkages with software platforms, telecommunication companies and mobile money providers. In Myanmar, only around 31% of the population (of almost 53 million16) has access to a formal bank. In 2016, Myanmar had 45 million mobile phones17, of which between 70 and 80 percent are smartphones, and mobile subscription rate is 93% of which 25% have access to internet. However only 2% of these use mobile banking and about 2% are using mobile money wallets. The slowness of uptake of mobile money is due to a lack of familiarity and the lack of trust, but the sector shows the greatest potential. There are 2 types of mobile money services, at present; The first type offers the possibility to open an account via the mobile money app or agents. From this account you can make payments, save money and receive interest and eventually receive a loan. You can add money to your phone at a small agent shop and withdraw from your phone at the same shop, no need to go to a bank (up to a limit). One can also move money from the bank account into the mobile account, but a bank account at the bank is not needed to start mobile banking or open a mobile account. Examples are:

Wave Money is a service with Telenor and Yoma Bank. A WAVE account is linked to a Telenor SIM. All transactions are secured with a PIN.

663 is a service with MCB Bank (Myanmar Citizens Bank).

16

Myanmar Country Brief, UNCDF 2018 17 FORBES, Aug 10, 2016, Myanmar: 45 Million Mobile Phones And The $19 3G Smartphone

month 1 month 2 month 3 month 4 month 5 month 6 month 7 month 8 month 9 month 10 Paid into

the pot

BID amount 100 46 52 58 64 70 74 80.5 87 90

Month 1, leader 10 10 10 10 10 10 10 10 10 10 100

Month 2, person 1 10 4 10 10 10 10 10 10 10 10 94

Month 3, person 2 10 4 4 10 10 10 10 10 10 10 88

Month 4, person 3 10 4 4 4 10 10 10 10 10 10 82

Month 5, person 4 10 4 4 4 4 10 10 10 10 10 76

Month 6, person 5 10 4 4 4 4 4 10 10 10 10 70

Month 7, person 6 10 4 4 4 4 4 3.5 10 10 10 63.5

Month 8, person 7 10 4 4 4 4 4 3.5 3.5 10 10 57

Month 9, person 8 10 4 4 4 4 4 3.5 3.5 3.5 10 50.5

Month 10, person 9 10 4 4 4 4 4 3.5 3.5 3.5 0 40.5

100 46 52 58 64 70 74 80.5 87 90

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M-Pitesan is a service with Ooredoo and CB Bank.

True Money is a service with AGD Bank.

MyKyat is a service under a license from Myanmar to First Private Bank Limited. The second types are internet wallet services that only facilitate money transfers to others (private individuals, shops, utilities). You add money to your phone at a small shop and pay the bills. You cannot save money with this service and you do not need a bank account no savings in a mobile account attached, only a payment platform. Examples are:

OK Dollar, Ongo, Easypay, Myanpay, Mypay (some, such as Mypay, are targeting remittances from abroad as well18, through social media transfers) pending approval from the FRD.

WAVE money In August 2016, Wave Money became the first non-bank institution to provide mobile financial services in Myanmar. As an example the article mentions that at the start of February 2018, WAVE money had 1.3 million customers, or about 2.5% of Myanmar’s entire adult population who were connected through a network of 14,000 agents; early March 2018, WAVE worked with 18,000 agents, dispersed around 267 towns and villages and by end March 2018, the number has risen again, to 20,000, across 279 townships.19 The way WAVE works is relatively easy. Customers open an account which is linked to their Telenor cell phone number after which they are able to digitally transfer money to anyone else with a WAVE account. Money can be deposited in the account, or withdrawn from it, at any WAVE Shop – the network of mobile agents who are typically pillars of the local community – traders, farmers, village elders. Customers top up their account by handing over cash to the agent, who credits their account and sends them an SMS to confirm the transaction. Cash is taken out the same way. Money can be sent by anyone to anyone, whether they have a WAVE account or not: all both parties need is a valid picture ID. Transfers are easy to do even for rural area populations with limited experience using technology.

3.6 Serving the ultra poor In the future, when financial regulations become less restrictive, an increased number of financial loan products will become available whereby MFIs also target more diversified target groups, for example the ultra poor and insecure, at present they are underrepresented.

On the one side, an ADB20 blog mentioned that 'studies show that access to finance is positively correlated with economic growth and employment, although the causal relationship between them is harder to establish'. But on the other side, there are also indications that micro finance might not be the ultimate tool for poverty reduction for the extreme poor, it is more a tool for the moderate poor, with the assumption that people are already productive and not deprived21. Based on this evidence, that the

18

https://www.dealstreetasia.com/stories/mypay-to-acquire-singapores-fastacash-and-take-mobile-and-social-payment-to-the-next-level-67075/ Juliet Shwe Gaung March 10, 2017 19

https://www.euromoney.com/article/b17f84w654nscv/mobile-money-services-make-waves-in-myanmar, Asiamoney Mobile money services make waves in Myanmar, By: Elliot Wilson Published on: Tuesday, March 27, 2018 20

https://blogs.adb.org/blog/how-financial-inclusion-reduces-poverty-income-inequality 21

The miracle of microfinance? Evidence from a randomized evaluation, Abhijit Banerjee† Esther Duflo, Rachel Glennerster, Cynthia Kinnan, version: March, 2014

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ultra-poor were not being reached, graduation models were developed which specifically targeted the ultra poor with finance assistance but also (and possibly more importantly) with capacity development programs, skills training, and mentoring which was identified as providing better chances at uplifting the ultra poor. Some graduation models examples are: BRAC's graduation model which supports the ultra-poor during 2 year (capacity development and finance), after which they are deemed ready to use mainstream credit services, see Annex 8: BRAC graduation model. The model is not yet followed in Myanmar, but is working well in Bangladesh. Other large programs implementing something similar to graduation models (but not in Mandalay city) are PGMF and Vision Fund. Their programs also use elements of compulsory training modules (capacity development) to go along with financial services packages. In addition these both organisations also involve village development committees and others (in the village) around their clients to participate in the programming, to encourage a growth environment for the ultra-poor. So these graduation models are available to a certain extend in Myanmar already. The introduction of innovative new projects around Nano and ultra-micro loans linked to mobile technology and the targeting the ultra-poor who earn irregular incomes, is being developed by Zigway Ltd. Zigway is a mobile (smartphone operated) platform through which the "ultra poor" can be reached. The company works together with loan providers to reach the ultra poor like day labourers, who live on daily wages. Mainstream micro finance can not service this group because of labor intensive processes and starting loans of 100,000 kyat. Zigway (being piloted already) are building a mobile platform to enable low income people to access nano-loans, quick, cheap and flexible to cover their daily needs. The targeted amount for loans is 20,000- 50,000 kyat per week (or even smaller and just for 24 hours to a week), which is too complicated for MFIs and would generally be where money lenders would step in. One of the challenges is identifying what criteria to choose to define creditworthiness, in particular for groups that lack proof of income or home ownership that are typically used to gauge repayment risk, alternative criteria will need to be used, such as for example mobile phone usage patterns."22

3.7 Development Partners involved in financial inclusion, Financial inclusion has been on all the development partners mind, as there was (and still is) a massive demand in rural areas for more finance for rural activities. Most development partners are involved in the finance sector through either facilitating funds to be disbursed within the country (often for women), or through training of MFIs, banks, Ministries etc to upgrade knowledge and skills within the sector, or at policy levels with the Ministry of Planning and Finance (MOPF), the Financial Regulatory Department (FRD) or the CBM. Some of the programs in the finance sector in Myanmar are:

The UN Capital Development Fund (UNCDF) has been operating in Myanmar since 2012. UNCDF Myanmar has been operating the Expanding Financial Access (EFA) program, which aimed at increasing formal financial inclusion in Myanmar from 30% to 40% by 2020. UNCDF also operates the Market Development Facility, which functions as a wholesale financial agent, which is able to take on risk and provide leverage for outside sources of capital boosting undercapitalised MFIs operating in Myanmar. Previously, under the Microlead program, UNCDF provided performance-based grant financing to build greenfield operations, with MFIs such as ASA, Alliance and one Association of Credit Cooperatives (ACCU), (only Alliance is in the target area Mandalay city).

The International Finance Corporation (IFC) a member of the World Bank Group, has provided a

22

https://www.mmtimes.com/business/property-news/23050-start-up-takes-on-moneylenders-with-short-term-microfinance-loan-options.html

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financing package of $13.5 million to several MFIs ($1.5 million stake in Maha Agriculture Public Company (Maha MFI), and $6 million in loans each to Fullerton Finance (Myanmar) LTD (Fullerton Myanmar) and Early Dawn Microfinance Company Limited (DAWN) (only Fullerton is in Mandalay city and was interviewed).23

The US Agency for International Development (USAID) is implementing a multi-bank loan portfolio guarantee scheme with five local MFIs. The program will be able to cover 50% of the losses for loans that qualify for the program. The five MFIs participating in the guarantee scheme are ASA Microfinance, LOLC Myanmar Micro-Finance, Myanmar Development Partners Company, Pact Global Microfinance Fund, and Proximity Designs. The funds are used for loans to the agricultural sector. 24

The Microfinance Risk Participation and Guarantee Program of the Private Sector Operations Department of the Asian Development Bank (ADB) is also a program designed to share the risks and to promote local lending. Under the program, ADB selects partner financial institutions that provide local currency loans to ADB-approved MFIs. ADB partially guarantees the default risk of these MFIs, thereby

assisting in making additional funds available to the MFI sector.25

The Livelihoods and Food Security Trust Fund (LIFT)26 is a multi-donor trust fund established in 2009 and focuses on improving the lives of people in rural Myanmar. - Microfinance remains the largest component of LIFT’s financial inclusion programme. By the end of 2015, LIFT was supporting 41 microfinance partners:

Nine local microfinance organisations (local NGOs): Ar Yone Oo (AYO), Border Development Association (BDO), Ratana Metta Organisation (RMO), Environmental Conservation and Livelihood Outreach Foundation (ECLO), Myanmar Heart Development Organisation (MHDO), Social Vision Service (SVS), YMCA, Wan Lark, and The Sun Institute

24 credit cooperatives supported by the Asian Confederation of Credit Unions under the MicroLead project

Three international microfinance NGOs: Pact Global Microfinance Fund (PGMF), Proximity Designs, GRET (Chin) and GRET (Dry Zone)

Four international microfinance companies: ASA International, Alliance Myanmar Microfinance, Fullerton Myanmar Microfinance, and Vision Fund

In all, these microfinance providers reached nearly 1 million clients from 12,658 villages countrywide. LIFT microfinance partners provided more than USD 100 million of agricultural loans to more than 370,000 clients in 2015 (equivalent to 10% of loans disbursed by the Myanmar Agricultural Development Bank (MADB) in 2013-14). LIFT (and IFC) also supported the Myanmar Microfinance Association (MMFA) to conduct technical training, with MFI staff as well as with the FRD of the MOPF. With the assistance of LIFT, the MMFA has since established its own Microfinance Training Centre in Yangon. LIFT also disbursed nearly USD 80 million to 15 innovative projects; this investment will leverage an estimated sum of USD 250 million, for 1.5 million new clients by 2018. These programs are:

Loans for migrants – Proximity Designs

Debt Consolidation – Vision Fund

Refinancing for those affected by natural disasters – Proximity Designs, PGMF, Vision Fund

Promoting saving-led financial services – UNCDF Microlead, CCA

23

IFC injects $13.5 million into local microfinance institutions, June 29, 2017 by thiha, https://consult-myanmar.com/2017/06/29/ifc-injects-13-5-million-into-local-microfinance-institutions/ 24

USAID backs MFIs with $10m guarantee, Myanmar Times, Friday 20, April, 2018 25

ADB Bolsters Microfinance Program with $100 Million in Additional Financing, 14 December 2017

https://www.adb.org/news/adb-bolsters-microfinance-program-100-million-additional-financing 26

https://www.lift-fund.org/financial-inclusion

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Institutional capacity building for microfinance organisations and institutions – IFC, PGMF (MARC), GRET

The Partial Risk Guarantee Fund and term financing loans especially for Hire Purchase - YOMA Bank

Hedging Facility of Currency Exchange Risk for LIFT Financial Inclusion Partners and Other MFIs – TCX Fund, CordAid.

4. Financial services in Mandalay

4.1 Supply side of Financial Services in Mandalay As mentioned previously, the Myanmar Micro Finance Association (MMFA) provided us with a list of the micro finance institutions servicing Mandalay city / Mandalay region, compiled by the FRD, there are 45 MFIs operational in Mandalay City.

4.1.1 Relevant service providers in Mandalay - MFIs, There are two well-known micro finance INGOs active in Mandalay, Pact Global Microfinance Fund (PGMF) and Proximity (IDE-Proximity Designs), the latter is focusing in particular on farmers in underserved areas, not in the city, hence are not part of the focus for the report. The FRD also identified 3 NGOs providing micro finance in Mandalay, which the research team has not been able to locate. There are also 33 local companies identified in the list, we were able to locate 14 and interviewed them by phone or visited them. These are rather small organisations with limited staff and not that much capacity. We focused on the 15 International companies, that are relatively well known for their work in Micro finance worldwide, in particular we focused on Vision Fund Myanmar, SATHAPANA, BRAC Myanmar, Advans Microfinance Myanmar, Alliance for Microfinance Myanmar. Below we present a number of these organisations and their specifics, all are implementing loan schemes and some a saving scheme as well, in Mandalay City and or region.

Pact Global Microfinance Fund (PGMF) is the oldest and largest MFI in Myanmar. It started operating, as Pact, in 1997 with the support of UNDP, when Myanmar was still a closed society under military dictatorship. In 2014 Pact handed over the program to the newly registered organisation Pact Global Microfinance Fund. PGMF has worked with more than 1 million people, 98% of them women. It has more than 640,000 active clients, in more than 9,450 villages and operations across 51 townships. It has $117 million in outstanding loans with a savings portfolio of $30 million and growing. The PGMF focus is more on rural communities and involving village development committees and other local authorities in community development, improving the borrowers’ environment at the same time.

VisionFund has been operating in Myanmar since 2015 and currently serves over 170,000 clients through 48 branches27 nationwide and 38 key rural service centres. Initially, since 1998, Worldvision operated the fund that later became VisionFund in Myanmar. VisionFund has the type of loan products that could be relevant to the target group, in particular the different "social loans" and "daily rate worker loans". However even these daily workers need a reasonably stable daily income as well as a reasonable stable housing situation, to be able to access this loan.

SATHAPANA (Myanmar), founded in January 2015 and obtained a temporary License in June 2015 to operate a Microfinance business with 15 million US Dollars authorized capital. SATHAPANA started with 4 branches in Yangon, Bago, Mandalay and Ayeyarwady regions. SATHAPANA does both groups and business (commercial-individual) loans. They do not work with 'risky' groups.

BRAC Myanmar was established (in 2013). Their 2017 loan portfolio is 34 million USD, reaching 47,000

27 http://www.mizzima.com/business-domestic/visionfund-myanmar-launches-loan-scheme-factory-workers - VisionFund

Myanmar launches loan scheme for factory workers, By Mizzima, 17 February 2018

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women, through 42 branches in 37 Townships. BRAC (MFI company and NGO) could work together on a package of training and finance, and they would also see this as a start to roll out this program to a larger "risky" group- see their Graduation Model (annex 6)

Advans Microfinance Myanmar was incorporated in 2015 and received its licence to operate in October 2016. Advans is one of the 2 larger MFIs with their Head Quarters in Mandalay. Advans works with women who already have a business activity, they do not focus on clients without any business activity Women should have made some investment done already by themselves. Advans was mentioned regularly by respondents in the interviews in Mandalay as a good MFI.

Alliance for Microfinance Myanmar Ltd. was founded in 2014. They started in Mandalay, but aiming at covering the whole country. Alliance looks at both profit and social performance indicators. Alliance specifically focusses on the unbanked entrepreneurs (women in particular) and also introduces financial education to strengthen businesses and family welfare. The number of families served is 91,741 / Outstanding loan portfolio is $16,372,401 and Average loan size is $261. Alliance also focusses on women who already have a business activity and are relatively stable. As Advans they are mentioned regularly as a source of loans by participants.

Loans - An overview of the loan products and work approaches in Figure 7 Overview of Loan schemes and criteria, shows the limited variation within the different products. Most Micro Finance providers have group and individual loans (generally people start with a group loan and graduate to an individual loan). In Mandalay Region, PGMF and VisionFund are the only MFIs that have diversified the loan products, with a few more different types of loans, such as child education loans, extra loan, social loan, agricultural loan (Proximity design also provides different loans but they only work with farmers in remote areas). Savings - For most people being able to use a saving products would be of great benefit, at present people save (or sort of save) in the informal groups that were discussed in 3.4 Informal financial services. There are a limited number of MFIs with savings options as there are restrictions put on MFIs regarding which target groups are allowed to deposit in MFIs. At present MFIs are not able to receive deposits from the general public, the law stipulates that only borrowers of an MFI are allowed to deposit voluntary savings at that same MFI. Hence so far there are only a few MFIs that are taking more than the compulsory savings that borrowers have to deposit by law (5% of loan), Alliance MFI, is one of them. There are eight institutions with a deposit taking license (the license is only given out after 2 consecutive years of MFI profit) and not yet a lot of movement on the saving product. Another criteria put upon savings is the interest minimum of 15% p.a. It is safe to say that in Mandalay city, the number of savings with MFI is very limited. Figure 7 Overview of Loan schemes and criteria

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Description Pact Global Microfinance Fund (INGOs)

Vision Fund Myanmar Co., Ltd

SATHAPANA Co Ltd

BRAC Myanmar Finance Co., Ltd (Intl.)

Advans MFI Myanmar Co., Ltd (Intl company)

Alliance for MF & Myanmar Ltd (Intl)

City Vs Region (in Mandalay)

National Both Both Regional Regional Both

Gender (servicing women / men)

Both (mainly women) Both (86% women) Both Both (mainly women) Female Both

Business Sector All All All Not allow >> Bar, Alcohol shop and business is running with black money.

All, but targeted specifically at micro traders and salaried workers (who have small business activities such as stalls selling groceries, fish or fruit, tea and refreshments as well as small scale productions of traditional fabrics from cotton and silk).

All

Loan Size (MMK) Minimum

100,000 50,000 300,000 150,000 – 800,000 group loan

300,000 100,000

Loan Size (MMK) Maximum

5,000,000 2,000,000 5,000,000 10,000,000 (Individual loan)

1,500,000 5,000,000

Duration of Loan Different from 6 months – 1 year

From 6 months to 12 months

Group and Individual loan -4-12 months

Group (10 months) / Individual (6 months or 1 yr)

Group loan - Negotiable for 6 months or 10 months Individual Loan - 1 yr

6 months to 24 months

Annual Interest Rate

30% 30% 30% Group Loan 30% per year / Individual 30% per year

30% per year 30%

Payback Schedule monthly monthly once / month Group Loan - biweekly, Individual Loan -> 6 months or 1 yr,

Once in a Month, Credit Officer will go and collect at group meeting place.

bi- weekly or monthly

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Description Pact Global Microfinance Fund (INGOs)

Vision Fund Myanmar Co., Ltd

SATHAPANA Co Ltd BRAC Myanmar Finance Co., Ltd (Intl.)

Advans MFI Myanmar Co., Ltd (Intl company)

Alliance for MF & Myanmar Ltd (Intl)

Savings(Y/N)-can people save with the organisation?

Yes compulsory and voluntarily (15% interest rate)

Yes (The client have to save 1.5 % of loan for social benefit fund)

Only compulsory saving at the moment

Yes, Group and Individual > 5 % of loan need to save. 15.6 % annual interest. If clients leave the group before 1 yr, they will not receive the interest.

Compulsory – 5% loan amount at 15% interest.

1. Tha Pyay Savings Passbook –A plan for daily savings to manage daily cash and a 10% interest rate. 2. Sabae Savings Plan - Regular saving for large purchases, important events or to prepare for emergencies, regular deposits. 15% interest rate. 3. Padauk Term Deposit – Clients can save a large amount, at one time, in a secure way and earn up to 15% interest.

Group Vs Individual

both Both Both Both / Individual Loan (Male/Female) and Group Loan (Female)

Both (Group (3 - 6 members))

Both

Type of Loan (Group/Individual)- names of the loans and what are they?

1. Business Loan (Up to 500,000 MMK) 2. Agriculture Loan (Up to 500,000 MMK) 3. Micro and small enterprise loan (Up to 5,000,000 MMK) 4. Lease (Up to 5,000,000 MMK) 5. Extra Loan (Up to 150,000 MMK) 6. Social Loan (Up to 100,000)

1. Education loan (150,000 kyat) 2. Small loan (50,000 kyat) 3. Child development loan (150,000 kyat) 4. Individual loan (2,000,000 kyat)

Group loan (from 100,000 -700,000 kyat) Individual loan (from 800,000 - 2,000,000 =1st time, 800,000 - 5,000,000 kyat= 2nd time)

Group Loans (100,000 -600,000), Business Loan (800,000 -10,000,000)

Group Loan (300,000 - 1,500,000) Individual Loan

1. Mahamate Loan (Joint Liability Group 4 to 6 persons , 100,000 MMK to 500,000 MMK) 2. Shweyaung Anagat Loan ( Individual Small Enterprise: 500,000 MMK to 5,000,000 MMK)

Micro insurance (Y/N)

Yes (called Safety Net) Yes - see (a) no No, only compulsory saving

Client pay into a fund (1.5 to 2.5% total loan amount), if the client die, 50% of loan will be reduced and the rest have to paid by his or her family

No

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Description Pact Global Microfinance Fund (INGOs)

Vision Fund Myanmar Co., Ltd

SATHAPANA Co Ltd BRAC Myanmar Finance Co., Ltd (Intl.)

Advans MFI Myanmar Co., Ltd (Intl company)

Alliance for MF & Myanmar Ltd (Intl)

Loan Criteria 1. Age between 18 to 70 2. Must be resident at current place at least two years 3. Grouped 3 to 15 members and must follow group rules 4. Husband (or) Wife must agree 5. Only one person can apply the loan in a family 6. Must have other income source 7. Not doing illegal business 8. Not on-lending 9. Must attend the financial trainings providing by VisionFund

Age 18 already, Must be a good morality, Must have other income source, Not doing illegal business, Women are most priority , Not be a MFI staff Will not move address Have good repayment capacity 1. Copy of national registration card (NRC) 2. Copy of household registration card 3. Residential address acknowledgement letter 4. Borrowers' photo (Optional)

Group Loan (need to live related area, need to show NRC card, and need to show business (no need to show business license). Individual Loan (Need to show related business documents).

Members must guarantee each other that the recipients are "good" people and have been living around the group related area. Guarantees from husbands and information from neighbours is also requested.

1. Age between 18 to 60 2. Must be from low income family 3. Must has been resided current place at least two years 4. Have existing business with at least one year 5. A friend or a relative must recommend experience 6. A person who recommend own land and house

(a) VisionFund offers savings programmes that enable those without a reliable and regular income to save funds to be used in the event of disaster or misfortune. VisionFund also works with World Vision to develop savings groups; whereby members from a community come together to save and borrow from a central fund. From the Social benefit fund, in case of death (1) Client Self - 80,000 Kyat, (2) Wife/Husband - 50,000 Kyat, (3) Children – 40,000 Kyat. In case of death client, if still more than 80,000 Kyat outstanding then the loan is cancelled

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4.2 Demand side for financial services in Mandalay The demand side data is based on a small sample of randomly interviewed women with small business, representing more or less the potential target group as well as desk research information gathered from the "What Women Want - Financial Diaries Research" (conducted by L-IFT (Myanmar) Co Ltd)28. The random interviews took place with 20 female small business owners in Mandalay city and in Amarapura town (the latter to be able to interview weavers, as a part of the handicraft sector around Mandalay city) took place. More details can be found in Annex 11 The characteristics of the women involved in the short interviews are described below, most are selling products (while some are also the producers of these products). Most were between the age of 40-<50, most have loans and most (only 8 out of 20 not) have more than 1 business that they are involved in, with other family members or with their spouse.

Sample • 20 women-led / owned businesses in

Mandalay and Amarapura • Retailers & Producer / Retailers (see right) • 12 out of 20 involved in more than 1 business.

Total 32 businesses / 20 interviews). • Most were between the age of 40-<50 years

(10/20 interviews) • Most have a current loan

Primary Business Activities • selling longyi • weaving longyi • selling clothes • selling cold drinks • farming and selling vegetables • selling flowers • selling food at the market • sewing from home • restaurant owners • handicraft shop owners

The reasons to get a loan vary a lot and range from buying raw materials and expanding the

business, as well as to pay upfront rental for shops. All of these reasons were to be expected, because micro finance loans are generally only provided for those reasons. o People were very frank and also mentioned that they use their loans to give donations, to pay

for education, for an emergency or to cover losses.

Looking at whether specific "loan needs" were directed or satisfied by specific finance providers, there does not seem to be a pattern, however this is an extremely small sample. Only VisionFund provides different types of loans in Mandalay city. Market Money lender loans were also used for many different things (even though these loans are very expensive).

Characteristics of the loans: Loan sizes varied from 100,000 up to 5,000,000 kyat (to build a house).

o The size of the first loan also varied a lot, from 100,000 to 5,000,000. o The larger amounts from 1,000,000 to 5,000,000 were in relation to upfront payment of rent for

a shop or the building of a house. The larger amounts are also provided with no collateral but shop agreements and building houses provide an indication that people are remaining in the area for a bit, safeguarding the investment.

28

L-IFT (Myanmar) Co LTD is conducting a yearlong biweekly research project, interviewing 800 women with small business, following their financial ins-outs and loan usage. Data will be used by BRAC and MFIL (Micro Finance Institutions) to develop people centred loan products which are more adapted to women's needs.

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The paperwork that is needed to receive a loan varies from “nothing" for the money lender (the people are well known to the money lender and they have a shop in the market where the money lender operates, and in cases of fraud the moneylender is able to find them and embarrass them), to copies of NRC, household book, photo, rental agreements for house or shop and recommendation letters.

The repayment schedules are reasonably flexible, with the moneylender being the most flexible (the money lender also walks around on the market). However some mentioned that repayment on a 2 weekly base does not always coincide with the cash flow of the businesses (which is monthly or even 2-3 monthly when seasonality is involved).

The Interest rate paid by people depends on whether respondents took out a loan with a formal organisation or with a money lender, and in some cases people did not know as they are only aware of how much they have to repay. All MFIs require 2.5% per month (maximum allowed by law) and the market money lender varies per amount of money and amount of repayment time needed, but up to 10% and more.

4.2.1 Challenges with micro finance schemes, according to micro finance clients Group meetings and structure

Attending group meetings is difficult when you work during day time, so some women stick with the more expensive provider (money lender) as they do not require group meetings one.

Some people change to other MFIs because of the group meetings that they do not like or cannot attend.

Credit Officer (CO) can only visit at daytime and not everyone has the time during the day.

Repayment by bringing the money to a branch office is faster than having to sit in a group meeting.

If group members run away with the money, it is a heavy burden on the others (solidarity principle), who have to repay the "lost" loans, sometimes up to 6 peoples loans.

Time between loans

People do not want to wait 2 months between finalizing repayment of loan 1 and disbursement of loan 2 especially if the funds are to run a business (working capital). They want to be sure about the amount they will get and the time they will get it, for business planning.

Repayment schedule

Payback every 2 weeks is not effective for everyone; especially when clients buy on credit and pay at the end of the month

People would like to use the loan longer; so pay back over a longer period and not start immediately (sometimes 5 days later) with repayment.

The Money lender

Not complicated, immediate and fast and they collect at the work spot, clients do not need to show rental agreements, or to show property or possessions that they do not have; the amount is much larger from the money lender. They pay more interest but sometimes it is the only way, especially when the amount is very large.

Market vendors say that collection at their daytime job venue (in the market) is very convenient.

Loan amount

For some trading businesses a loan amount of 300,000 is not enough, when the inventory is already worth 2,500,000. The loan amount should be based on the need of the business.

Many people have several different loans, its challenging to repay everything in different times. But they have to do it like this because there is not enough finance to run the business and household expenditure. People would like to consolidate their loans.

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Short term small loans

There is a need for short term loans for 3-9 days and for small amount (up to 50,000 kyat) loans, now people pawn their jewellery or ask family or money lender.

Saving

Many people would like to save; only a few organisations offer this service at the moment.

4.2.2 Potential women target groups The FCFW might focus on working with women in the targeted wards for the 'Community based solid waste management program29'. These poor women and community groups will potentially be involved in economic income generating activities such as: pilot composting, urban gardening, or handicraft activities, in relation to Component 1: Community based solid waste management. For Component 2. Handicraft entrepreneurs the FCFW will focus on Individual female entrepreneurs that might be interested in establishing or expanding a recycled handicraft business, women leader entrepreneurs and Women producers of handicrafts specifically. For Component 3. Women’s networks for sustainable living environment will prioritise advocacy work along the lines of gender and waste collection and focusing on expanding working with different women groups in the region. In short, the following categories of target groups: Figure 8 Potential women target groups

Target group 1 - the most vulnerable group and possibly the largest target group (female street and landfill pickers) would have the following characteristics:

Female (with children), limited time

Either economic migrants or just not from Thingazar Creek, o No household-book for this area o Not necessarily having lived in Mandalay (and

particular area) for a long time

Not necessarily having a rental agreement, as they are living with extended family

No steady job, although collecting recyclable garbage is reasonable stable, but no investment

No possessions

No businesses, or shop rental papers

Anything they would do, would be seen as a start-up

Not necessarily having an NRC card

Used to roaming the streets, and not sitting in one place and potentially moving when the going gets tough, very flexible.

Increase chances of being victims of gender based violence, drugs, etc. with the psychological trauma going along, due to the miserable circumstances they are living in.

Target group 2 – (Poor) Women

Female (with children), limited available time

Already doing some income generating activities and expanding with handicraft or composting

Better living conditions, but still poor

With paperwork and some possessions

And having lived in the area for a long time

Able to get recommendations on good behaviour

29 A program funded by the Urban Climate Change Resilience Trust Fund has just commenced in several wards in Mandalay. Further information about the wards and areas included will be provided to the team.

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5. Evaluation of potential "financial inclusion" partners for FCFW

5.1 Evaluation criteria The potential micro finance partners for FCFW would need to be able to focus their service offering to a target group of "ultra to very poor" (without assets).

Demand side criteria Supply side criteria

Very small loans as a starting point, with flexible repayment schemes, the loans might need to be for other ‘needs’ than business

If they are the "very poor" it needs to be a total package of "training plus different type of finance"

The target group has limited to none paperwork, at least far less from what is normally required for MFI loans

Funds to cover risks of non-repayment of loans, covering system adaptations for different loan styles

MFI service offering needs to fit with the lifestyle of this target group – they collect rubbish on the street

Funds to cover extra effort (staff and programs) in working with these 'more time consuming' groups

The service offering might need to go together with assistance to build assets, to build skills (technical and financial), and further mentoring for increased life skills

The number of clients need to be large enough to be interesting for an MFI to put in the effort to develop something for a specific group

Assistance in being able to build up a credit history Innovative tools to assist these target groups to build up a credit history

The MFI needs to have the ability to report to donors

The MFI needs to be interested, at this point in time, to work with this target group.

Have some prior experience with working with the "ultra-poor" in a systematic manner.

Be a sustainable organisation on its own.

5.2 Selection

MFIs

Most MFI operating in Mandalay city (the area where the FCFW focuses on) were contacted and six international MFIs were selected further discussions. The selection was based on scale of operations, financial capacity, and different services on offer for different target groups. Many Myanmar MFIs are small, evolved from being a credit cooperative, and very much operating with its own "members" and not for the general public. Selected for further discussion in Mandalay City were: PGMF (Pact) / Vision Fund Myanmar30 / SATHAPANA / BRAC Myanmar / Advans Microfinance Myanmar / Alliance for Microfinance Myanmar

30 PGMF and Visionfund are not focussing their lending in Mandalay city but are large with different loan types and prominent

in the region and work with the poor in different villages around Mandalay city.

29 | P a g e

However, at the time of interviewing, none of the MFIs worked with target groups that still have to set up a business, all require certain income generating activities already being in place (irregular garbage collection not necessarily being permitted as such an activity) and none are working with the ultra-poor in the city. A summary of services that are available among the selected MFIs are: All have both group and individual loans Interest rates 30% per annum, by law Pay back schedules varying from 6-10 months to 1 year Some paying back every 2 weeks, others monthly All are mostly working with women (some women only). Only 2 are offering savings other than the compulsory 5% Very limited product offerings -> only 3 have differentiated among the loan products, the other 3

have the same ‘simple’ business loans (for group/individual). 4 are able to offer the full (max 5000 USD without collateral) loan. None are working with startup businesses None are working with the ultra-poor (without any assets) in the city Other financing solution the team looked at were:

Mobile money

Mobile money solutions potentially provide a cost effective solution to roll out to a large target group and where users could start with savings (developing a credit history) Mobile wallet, with a bank account Mobile money transactions, savings and eventually loans can be done using these options

Wave Money is a service with Telenor and Yoma Bank.

663 is a service with MCB Bank (Myanmar Citizens Bank).

M-Pitesan is a service with Ooredoo and CB Bank.

True money is a service with AGD Bank.

myKyat is a service under a license from Myanmar to First Private Bank Limited. Microloan facilitation Owning the app/platform and linking with different microloan providers to provide Nano loans. Example: Zigway, who aims at linking day laborers with nano loan providers, although there are not yet many of these and the Zigway was in development.

Informal Moneylenders and informal Saving Groups

Informal money lenders are the easiest way to access funds for all target groups, but they are expensive, a comparison:

MFI Informal (Moneylenders)

Interest Rate Capped at 2.5% per month (30% per year), by law

3% to 10% (and more) per month.

Repayment 1 or 2 times per month. Fixed schedules Daily, weekly. Flexible schedules

Flexibility/ Convenience

Payment at Group meeting or at the MFI branch

In the market, the lender passes by regularly.

30 | P a g e

Size of Loan The size of the first loan varied a lot from 100,000 to 5,000,000. The larger amounts were for upfront payment of rent for a shop or to build a house (save asset building).

Some respondents mentioned that for the money lender there is no limit.

Purpose to get a loan (from the 22 interviewed women with small businesses)

No discernible pattern; Business (12/20) and Personal (8/22); Planned and Unexpected; Expand business 6/22, Religious donation 3/22, Education 3/22 Business premises (rent) 3/22

However, of the MFIs, only PGMF and VisionFund are able to provide loans for other than business purposes, for example for education, health etc. But they are not operating in Mandalay city centre.

Money lenders don’t care.

The informal saving groups appear in many parts of the country, particularly around markets. It is a fast way of receiving some funding and the barriers are low. The groups come together based on people knowing each other and their capacity to participate. Selection of MFI partner depends on which target group the project is likely to work with:

Target group 1 - the most vulnerable group and possibly the largest target group (female street and landfill pickers) would have the following characteristics: • Female (with children), limited time availability • Either economic migrants or just not from Thingazar Creek,

o No household book for this area o Not necessarily having lived here for a long time

• Not necessarily having a rental agreement, as they are living with extended family • No steady job, although collecting recyclable garbage is reasonable stable, but no investment • No possessions • No businesses, or shop rental papers • Anything they would do, would be seen as a start-up • Not necessarily having an NRC card • Used to roaming the streets, and not sitting in one place and potentially moving when the going gets

tough, very flexible. • Increased chances of being victims of gender-based violence, drugs, etc. with the psychological

trauma going along, due to the miserable circumstances they are living in.

MFI standard selection criteria for Loans: Target group 1 This target group does not fit the generic MFI client selection criteria, as they possess nothing that indicates permanency, no assets, and nothing to keep people from running away. This target group is best served by specific interventions strengthening their capacity in general through a Graduation model. Whereby the target group enters a 2 year type of program of asset building (assets being granted to them) and saving, after which the situation of the target group slowly gets better and they are able to graduate and become a full client. This type of program is very intensive and not within the mandate of all the MFIs. Annex 8 describes the BRAC Graduation Model, used in Bangladesh (not yet in Myanmar), which would be very potential for this type of target group.

Target group 2 – (Poor) Economically active Women (much easier to link to an existing MFI) • Female (with children), limited available time • Already doing some income generating activities and expanding with handicraft or composting

31 | P a g e

• Better living conditions, but still poor • With paperwork and some possessions • And having lived in the area for a long time • Able to get recommendations on good behaviour

MFI standard selection criteria for Loans: Target group 2 For Individual loans the criteria are generally stricter than for group loans, and often people have to first go through a group loan before the MFI grants them access to an individual loan. Some of the criteria to get a loan are (not the same for all): • Need to live in the area for 2 years, proof of home address / must have own a house • Able to attend training during day time • Able to attend group meeting during day time • Group leaders need to be a guarantor for the whole group • Show Household (Family) Book / Show NRC • Guarantees and approval of spouses and/or neighbours • Must have other income sources already / must have an existing business • A person who recommend must own land or a house • Show business registration / show the business • Must be able to show personal assets • Need to be between 18 – 50, 55, 60, 70 years

Comments from the MFI sector on the different target groups Target group 1 In the discussions with the different MFIs, the main challenges that MFI staff identified for the FCFW target group (1) in Thingazar Creek but also for the ‘even more’ informal garbage pickers at the landfills. • The target group is 'very poor' to 'ultra' poor, • They are very likely migrants or otherwise people without a fixed rental (own) house • Their income fluctuates from day to day • They have not been able to invest in assets due to lack of income (carts are owned by others,

sometimes they have a bicycle). • When roaming the streets, a certain 'free spirit' is developed which is not conducive to more

regulated income generation activities, even attending meetings could be a challenge. • They have limited "paperwork” (no household book, registration for rent/address or even an NRC). • The target group needs more than just a loan, they also need training Target groups with these challenges do not fit most MFI programs. They require additional support and not immediately a loan of the type that are being provided by the MFIs. Target group 2, which are more regular women with a small business but poor, fit with most existing MFIs criteria and links could easily be developed. For these women organisations like Advans and Alliance, with their headquarters in Mandalay would fit well for micro finance.

32 | P a g e

Annex 1: Annexes to the TOR Initial thoughts for a further project by the FCFW are:

Annex C. Proposed project components

Outcomes: The proposed project outcomes would be effective approaches piloted to empower women in urban recycling.

Rationale: The project will pilot and compare three different approaches of working with women to raise awareness of solid waste management and recycling and to lift the stigma from those working with waste and recycled materials, and of the products produced from these.

The activities funded would both help to increase the incomes of women as well as giving them voice in solid waste management and beyond. The evaluation of the pilots would assess their effectiveness both in empowering women as well as improving solid waste management.

The project would be comprised of the following components:

Component 1: Community based solid waste management Partners: UCCRTF team, Department of Cleansing, Community groups, finance institutions Possible Activities: Mobilise women in management and operation: Income generating activities: for example pilot composting , urban gardening, or handicraft activities Networking: link to women’s organisations, government etc Sustainability Indicators: Percentage of management/operation teams that are women Additional incomes from solid waste

Component 2. Handicraft entrepreneurs Partners: Women entrepreneurs, possibly Women’s Affairs Committee, financial institution Possible Activities: Identify entrepreneurs and target families: Importance of strong led woman who can identify families to produce goods. Product design and development: Training and production Marketing Developing social links: For example with markets, government, traders, wholesalers etc Sustainability indicators: Expanding markets, sustainable business model,

Component 3. Women’s networks for sustainable living environment Partners: Women’s Affairs Committee and Women’s Advocacy Group members (potentially others), Department of Cleansing. Possible Activities: Institutional/organisational strengthening for example in organisational management, financial management, procurement etc Networking and coalition building: Within Myanmar with other women’s groups/ networks for example, in Yangon. Externally with women’s networks in Southeast Asia, for example, CWEA, JAS etc. Awareness raising: Reaching out among members with specific messages about solid waste management and sustainable clean living environments, combined with women’s rights/gender equality messages.

33 | P a g e

Income generating: Small handicraft activities and possible urban gardening Lobbying: Lobbying with government for policies and practice to improve the living environment. Social mobilisation/facilitation: Training in social mobilisation and facilitation. Sustainability and Indicators: Womens’ organisations able to access funding from other sources Engaging in activities beyond SWM

34 | P a g e

Annex 2: List with all MFIs in Mandalay REGION No. Type Name

1 INGO (3) IDE-Proximity Designs

2 Pact Global Microfinance Fund

3 The Association of Medical Doctors of Asia (AMDA)

4 NGO (3) Sakar Wah Organization

5 Association for giving awareness

6 Anar Gat Alin Tan Foundation

7 International Company (15) Vision Fund Myanmar Co., Ltd.

8 Fullerton Finance Co., Ltd

9 BC Finance Co., Ltd

10 Early Dawn MF Co., Ltd

11 SATHAPANA Co., Ltd

12 BG MF Myanmar Co., Ltd

13 Tu Tu Fiance WCI Co., Ltd

14 Pacific Star Finance Co., Ltd (Not Operate yet)

15 BRAC Myanmar MF Co., Ltd

16 AEON Microfinacne Myanmar Co., Ltd

17 ADVANS Microfinance Myanmar Co., Ltd

18 DARIU Microfinance Myanmar Co., Ltd

19 Alliance for MF & Myanmar Ltd

20 IBK Capital Myanmar Co., Ltd

21 JB Capital Myanmar Co., Ltd

22 Local Company (32) Tun Foundation Co., Ltd

23 Ngwe Yamin Services Co., Ltd

24 Tat Toe Aung Services Co., Ltd

25 Ye Min Htun Co., Ltd

26 Zanbu Moe Co., Ltd

27 Kissme Co., Ltd

28 NND Co., Ltd

35 | P a g e

29 Laut Myout Lann Co., Ltd

30 Thet Paing Swe Co., Ltd

31 Win Myint Khaing Co., Ltd

32 Ma Mae Naing Co., Ltd

33 Yone Kyi Htike Thaw Khon Arr Co., Ltd

34 Mahar Agricultural Co., Ltd

35 Shwe Sin Htut Family Co., Ltd

36 Thu Htet Moe Co., Ltd

37 Swe Sat Co., Ltd

38 Sain Nadi San Co., Ltd

39 Win Phalawah Co., Ltd

40 Than Hlan Co., Ltd

41 Soe San Zaw Co., Ltd

42 Shwe Eain Thu Co., Ltd

43 Thit Taw Partnership Economic Central Department Co., Ltd

44 Ta Thon Thon Co., Ltd

45 Anawah Phyo Kyal Co., Ltd

47 Shan Shan Co., Ltd

48 Naing Win Ohn Co., Ltd

49 Zar 7 Zar Co., Ltd

50 Thukha Kyi Thar Co., Ltd

51 KTG Co., Ltd

52 Shwe Pyi Mandala Co., Ltd

54 Great Victory Co; Ltd

55 BC Finance Co., Ltd

36 | P a g e

No. in

MMFA

list

Type of

Compay

Company

Name

City Vs Region

(in mandalay)

Gender Business

Sector

Loan Size

(MMK)

Minimum

Loan Size

(MMK)

Maximum

Loan Criteria Duration of

Loan

Annual

Interest Rate

Payback

Schedule

Payback type Savings(Y/N)-can

people save with

the organisation?

Group Vs

Individual

Group Vs

Individual

(Regulation)

Type of Loan (Group/Individual)- names of the

laons and what are they?

Microinsurance (Y/N) Head Quarter

Info.

Contact Detail Contact

Number

Address Note

1 INGOs IDE-Proximity

Designs

Region Both Agriculture

related

200,000 600,000 Only target to smallholder farmers and

entrepreneurs across the villages

different seasonal No both 1. Crop Loan- Provides vital season-long working

capital in cash to cover input costs such as seeds

and fertilizer,along with hired labor, tools and

harvesting equipment (Average loan size: 250,000-

600,000 MMK)

2. Livestock Loan - Funds to Purchase and raise

livestocks ( Average Loan size: 200,000 MMK)

3. Small Business Loan - Target to the rice traders to

Vegetable Vendors - provides rural entrepreneurs

the capital (Average Loan Size: 250,000 -600,000

MMK)

4. On-the-Go Loan- target to the small farm

espcially for the family-run businesses which they

can seek the business opportunities. (Average Loan

size: 200,000 MMK)

No Yangon 09-964555270 No. 24, Saya

San

Road,Tharthana

Yeik Thar

Ward,Bahan

Township,Yango

n, Myanmar

2 INGOs Pact Global

Microfinance

Fund (PGMF)

National Both - but

mainly

women

All 50,000 5,000,000 Group Loan ( need to live related area,

and can be able to attend providing

training and group meeting.)

different, up to

1 yr

Group Loan

(Income

activities ) is

30% per year

Group Loan (

Non-income

activities >>

health,educati

on,ect... )is 24

% per year

For Group

Loan >>

Once in 14

days

For

Individual

Loan >>

Once in 28

day

For Group

Loan >> CO

will go and

collect at

group

meeting place.

Yes (15% interest

rate) PA

both Group (18 - 60

members), -

>Must give

grantee each

others.

Individual (After

having 1 yr

relationship with

PGMF, can get

large loan and

two men must

give

recommentation

for her.

1. Business Loan (Up to 500,000MMK)

2. Agriculture Loan (Up to 500,000MMK)

3.Micro and small enterprise loan (Up to 5,000,000

MMK)

4. Lease (Up to 5,000,000MMK)

5.Extra Loan (Up to 150,000MMK)

6. Social Loan (Up to 100,000)

*Group Loan (Income Activities and Non-Income

Activities)

*Individual Business Loan (1,000,000 - 5,000,000)

Yes (called Safety Net) Yangon

Mandalay (7

Branches)

Daw Mi Mi Khaing,

9797045012

No-497,Tower-

B, Diamond

Condominium,P

yay Road, Ward

8, Yangon

11041,

MyanmarKamar

yut Township

Pact allow the

people have NRC

card, and stable

living in related

area. For Migrant

people are not

available to give

loan. Because Pact

is giving training to

them, so they must

have time to attend

the proving training.

3 Intl. Vision Fund

Myanmar

Co;Ltd

Both Both (86%

women)

All 50,000 2,000,000 1. Age between 18 to 70

2. Must be resident at current place at

least two years

3. Grouped 3 to 15 members and must

follow group rules

4. Husband ( or) Wife must agree

5. Only one person can apply the loan in

a family

6. Must have other income source

7. Not doing illegal business

9. Not a lenders

10. Must attend the financial trainings

providing by Vision Fund

6 months to 12

months

30% Monthly

within 6

months, 8 M

or 12

Months -

depends

For

Individaual

Loan >> the

client must go

to office and

rapay

Yes (The client

have to save 1.5

% of loan for

social benefit)

Both From the interview

1. Education loan( 150,000 kyat)

2. Small loan (50,000 kyat)

3. Child development loan( 150000 kyat)

4. Individual loan ( 2,000,000 kyat )

The visionfund annual report show more different

loans

Yes From the Social benefit

fund, in case of death (1)   Client

Self - 80,000 Kyat, (2)  

Wife/Husband - 50,000 Kyat,

(3) Children – 40,000 Kyat

In case of death client, if still

more than 80,000 Kyat

outstanding then the loan is

cancelled

Yangon 09-778844961 No.19, Winsor

Estate Condo,

Shin Saw Pu

Road, Sanchaun

g Township,

Yangon,

Myanmar

No( C-2) 69 th

street Bet 62nd

and 63rd street,

Chanmyatharsi

Tsp, Mandalay

4 Intl. Fullerton

Finance Co;Ltd

Both Both All (target

to improve

the

livelihood

and micro

business)

50,000 5,000,000 1. Age between 18 to 60 2. National

Registration ID 3. home address proof.

3 months to 24

months

30% bi- weekly

or monthly

Yes Both 1.Group Loan ( 5 persons Solidarity Group:

50,000MMK to 500,000MMK : 3 months to 12

months) 2. Individual Loan (salaried person: 100,000

MMK to 500,000MMK from 6 months to 12 months,

Busienss Owner: 100,000 MMK to 5,000,000 MMK

from 6 months to 24 months)

No Yangon 01-9190551 225 Thumana

Street,Ward 3

Thaketha

Township, Yang

on, Myanmar

5 Company Vision Fund

Myanmar-

especiallly for

day labourer

interview

Regional Male/Fem

ale

All 100,000 For Casual(day) Labour Loan, * need to

show NRC Card, household paper and

must live in related area. And also must

have small business, such as selling

things.

For Individual Loan, * need to show all

business sectors.

Negotiable: 6

months, 8

months and 1

yr.

30% per year Once in a

Month

CO will go and

collect at

group

meeting place.

Both Commerce Loan

Agriculture Loan

Education Loan

Child Well-Being Loan

Emergency Loan

Casual(Day) Labout Loan (Satrt from 100,000)

Migrant Factory Worker Loan

Mandalay

- Pathein Kyi

- Chan Mya Thar

Si

- Amarapura

Pathein Kyi 9402692690 # 311, Pathein Gyi,

Patauk Shwe War

Street and Myo Pat

Lane.

Not giving detail

information. It

requests to go and

meet at related

branch office.

6 Intl. (Early) DAWN

MF Co;Ltd

Regional (NOT

yet

operational in

Mandalay)

Business

loan

3,500,000 Business Loan >> Must has 2 yrs relation

to get 3,500,000.

* Need to show NRC, household paper

and must live in related area

* Business operation must be 1 yr

30% per year Yes (1.25%

interest per

month)

Both *Group ( at least

10 members)

Business Loan

group guaranteed loan

seasonal agriculture

larger individual loan

Yangon Division

(15 branches)

Bago Division (13

Branches)

Mon State (5

Branches)

Kayin State (1

Branch)

Magway Division

(1 Branch)

Ma Yin Nyein Aye

(Manager)

9780989412 Bago ,mahar

myaing Street

Not giving detail

information. It

requests to go and

meet at related

branch office.

7 Intl. Pacific Star

Finance Co;Ltd

(Not Operate

yet)

Annex 3: List with interviewed MFIs (34) in Mandalay

37 | P a g e

No. in

MMFA

list

Type of

Compay

Company

Name

City Vs Region

(in mandalay)

Gender Business

Sector

Loan Size

(MMK)

Minimum

Loan Size

(MMK)

Maximum

Loan Criteria Duration of

Loan

Annual

Interest Rate

Payback

Schedule

Payback type Savings(Y/N)-can

people save with the

organisation?

Group Vs

Individual

Group Vs

Individual

(Regulation)

Type of Loan (Group/Individual)- names of the

laons and what are they?

Microinsurance (Y/N) Head Quarter

Info.

Contact

Detail

Contact Number Address Note

8 Intl. BRAC

Myanmar

Regional Groups

are

Women /

Individual

also men

Not allow

>> Bar,

Alchol

shop and

business is

running

with black

money.

150,000 10,000,000 * Group Loan (need to live related area,

need to show NRC card, and need to

show business (no need to show

business lincense).

* Individual Loan (Need to show related

business documents).

Group (10

months)

Individual (6

months or 1 yr)

* Group Loan

1.25% per 2

weeks (2.5 per

month)% per

year

* Individual xxx

* For Group

Loan >>

Once in 14

days

* For

Individual

Loan >> 6

months or 1

yr

* For Group

Loan >> CO

will go and

collect at

group

meeting place.

* For

Individaual

Loan >> the

client must go

to office and

rapay

Yes, Group and

Individual >> 5 % of

loan need to save .

* 15.6 % annual

interest

* If client leave from

group before 1 yr,

they cannot get

interest.

Both

*

Individual

Loan

(Male/Fe

male)

* Group

Loan

(Female)

*Group (20-30) * Group Loan

* Business Loan (800,000 -10,000,000)

No only compulsory saving * For Group >>

Member Book - 500

* Insurance >> 100

* If someone dead,

Brac provide

100000 ks .

9 Intl. AEON

Microfinacne

Myanmar

Co;Ltd

Both All Education Loan (Diploma's for IT, information

systems, web development etc) up to 9 months

(total fee 350,000 kyat, repayment per month

43,788ks) = 13% interest over the principle

S Loan - a hire to own scheme = in Mandalay only

just starting with motor bikes

After being in the S scheme -> people are members

and can get a real loan

10 Intl. DARIU

Microfinance

Myanmar

Co;Ltd

in the

mountanous

areas only

11 Intl. Alliance for

MF &

Myanmar Ltd

Both Both All 100,000 5,000,000 1. Age between 18 to 60

2. Must be from low income family

3. Must has been resided current place

at least two years

4.  Have existing business with at least

one year

5. A friend or a relative must

recommend experience

6. A person who recommend own land

and house

6 months to 24

months

30% Once in two

weeks

within 25

times

Monthly

within

6months to

24 months

Yes ( three types of

saving plan: interest

rate start from 10% to

15%)

Tha Pyay Savings

Passbook –A plan for

daily savings to

manage daily cash and

a 10% interest rate.

Sabae Savings Plan -

Regular saving for

large purchases,

important events or

to prepare for

emergencies, regular

deposits. 15% interest

rate.

Padauk Term Deposit

– Clients can save a

large amount, at one

time, in a secure way

and earn up to 15%

interest.

Both Group / Individual 1. Mahamate Loan (Joint Liability Group 4 to 6

persons , 100,000MMK to 500,000 MMK)

2. Shweyaung Anagat Loan ( Individual Small

Enterprise: 500,000 MMK to 5,000,000MMK)

Sort of (service fee paid 1.5 to

2.5% total loan amount), if the

client die, 50% of loan will be

reduced and the rest have to

paid by his or her family

Mandalay 09-2655-

91882

No. 64, Ward 642,

between 76 & 77,

between 35 & 36,

Mahar Aung Myay,

Mandalay

12 Local Ngwe Yamin

Services

Co;Ltd

Region Both All 50,000 300,000 1. Age between 18 to 60 2. Must be

from low income family 3. Must has

been resided current place 4. National

ID 5. Household Register

52 days 30% Daily (2,000

MMK)

No Group Group 1. Group Loan (5 persons at least : first time started

from 50,000 )

No Mandalay 09-2001324 No.(1/1), Nan Taw Yar

Ward, Mhan Tan,

Amayapuya Township,

Mandalay

13 Local Tat Toe Aung

Services

Co;Ltd

City Both All 100,000 5,000,000

14 Local Zanbu Moe

Co;Ltd

City Both All 100,000 500,000 1. Age between 18 to 58 2. Must has

been resided current place 3. A friend or

a relative must recommend experience

4. A person who recommend own land

and house 6. accept to chek personal

possession

5 months 30% Weekly No Group Group 1. Group Loan (5 persons at least : first time started

from 50,000 )

No Mandalay 09-2012638 No.501, Kyun Lone Oo

Shaung Ward,

Chanmyaetharsi

Township, Mandalay

15 Local Laut Myout

Lann Co;Ltd

City Both All 200,000 10,000,000 1. Age between 18 to 58

2. Must has been resided current place

3.  Have existing business with MCDC

business license

4. A friend or a relative must

recommend experience

5. A person who recommend own land

and house

6. accept to chek personal possession

6 months to 12

months

30% Weekly No Both Group 1. Group Loan ( currently unavailable for new group

: 3 to 8 persons per group, 200,000 to 300,000 MMK

per each)2. individual loan (must have business

license and tax receipt : 500,000 to 1,000,000 MMK)

No Mandalay 09-

420329629

(cc-2/69) 58st x59 st,

Kantharyar Ward,

Chanmyaetharsi

Township, Mandalay

16 Local Thet Paing

Swe Co;Ltd

City Both All 100,000 500,000 1. Age between 18 to 60 2. Must be

from low income family 3. Must has

been resided current place 4. National

ID 5. Household Register

6 months to 12

months

Depend on

group

No Group Group 1. Group Loan (5 persons at least : first time started

from 100,000 )

No Mandalay 02-59616 No.496, Mote Oo Tan

Ward, Tatpa Wadi

Ward, Chan Mya Thar Si

Tsp, Mandalay

38 | P a g e

No. in

MMFA

list

Type of

Compay

Company

Name

City Vs Region

(in mandalay)

Gender Business

Sector

Loan Size

(MMK)

Minimum

Loan Size

(MMK)

Maximum

Loan Criteria Duration of

Loan

Annual

Interest Rate

Payback

Schedule

Payback type Savings(Y/N)-can

people save with the

organisation?

Group Vs

Individual

Group Vs

Individual

(Regulation)

Type of Loan (Group/Individual)- names of the

laons and what are they?

Microinsurance (Y/N) Head Quarter

Info.

Contact

Detail

Contact Number Address Note

17 Local Yone Kyi Htike

Thaw Khon

Arr Co;Ltd

City Both All 100,000 500,000 1. Age between 18 to 60 2. Resident

Recommendation Letter from Township

Adminstration 3. Grouped 3 to 15

members and must follow group rules

4. Must have other income source 5.

Nation ID 6. Household Registration

10 months 30% Monthly Yes (1.8% per month) Group Group 1. Group Loans for 10 Months (100,000 MMk to

500,000 MMK per person)

No Mandalay 02-71050 No. (63) 26 St, 90 St. x

91 St., Mandalay

18 Local Mahar

Agricultural

Co;Ltd

Farmers only

19 Local Soe San Zaw

Co;Ltd

City Both All 100,000 200,000 1. National ID 2. Household Registration 53 Days 36% Daily (2,000

MMK)

No Individual Individual 1. Individual loan No Mandalay

20 Local Myat Kyun

Thar

Microfinance

Region Both All 150,000 600,000 1. Age between 18 to 55

2. Must be resident at current office

loaction

3. Grouped 3 to 5 members and must

follow group rules

4. Only one person can apply the loan in

a family

5. Must have other income source

4 months to 12

months

30% bi-weekly Yes Group 1. Group loan (Salary Persons (3 to 7 persons per

group): 150,000 to 600,000 MMK 3times per year

loan, Livelihood Loan (5 persons per group) 150,000

MMK ~ 600,000 MMK once a year loan)

No Yangon 09-

452105996

21 Local Internet

Wallet Co;Ltd

internet wallet

OK dollar

22 Local Ngwe Malar

Microfinance

City Both All 150,000 300,000 1. Age between 18 to 60

2. Must be resident at current place

3. Grouped 10 members and must follow

group rules

5. Only one person can apply the loan in

a family

6. Must have other income source

7. Nation ID

6 months to 12

months

30% monthly Yes Both 1. Group Loan (10 persons who have income in

family members : 150,000 MMK to 300,000)2.

Individual Loan ( Business or Salary person : 100,000

MMK to 10,000,000 MMK)

Yes Yangon 09-

457066600

No.(146), Mya Sabel

Street (North), 8 Qtr.,

Mayangone Tsp.,

Yangon, Myanmar

23 Local Farmer

Business

Development

Co;Ltd

farmers

24 Local Shwe Sein

Co;Ltd

(Closed )

closed

25 local  BC Finance 50,000 5,000,000 1. Must be a real resident at current

place

2. Must be from low income family

3. Women are most priority

4. Must have a income generation work

30%  Once in two

weeks

within 12

times

Bet 62nd and 63rd

 street Bet 28th and

29th street

Chanayetharsan Tsp,

Mandalaly

26 Local Win Myint

Khaing Co;Ltd

city 200,000 1. Must be a real resident at current

place,

2. Must be a good morality

3. Must have other income source

4. Not doing illegal business

5. Women are most priority

6. Not be a MFI staff

30%  Daily within

53 days

09-2011430   No( 470)tapawadi

street chanmyatharsi

Tsp, Mandalay

27 Local Than Hlan

Co;Ltd

150,000 1. Age 18 already

2. Must be a real resident at current

place

3. Must be from low income family

4. Women are most priority

5. Not be a MFI staff

6. 0nly one people can apply from each

family

30%  Daily within

1 month

02- 73591  No( 235) Bet 30th and

90th street

 Thrihaymar( w)

Chanayetharsan,

Mandalay

28 Company Tun

Foundation

Bank changed

to Tun

Commercial

Bank

Regional Both House

Collateral

50 % of

collateral (For

Mandalay

Branch)

50 % of

collateral (For

Mandalay

Branch)

Need to show a business's licence,

registration, ect…

1 yr 13% per year Once in 3

months is

Official.

Can go and

repay back

several times

during 3

months. (or)

Loan

collector will

go and take at

the end of

after 3

months.

yes

Current Account (8.5%

interest rate)

Fixed Deposit

(1 month ) 9%

1 yr 10%

Individual Accountant will

go and check

require

information to

loan taker

Individual - Only collateral Loan ( Loan amount is

depend on Township's regulation).

Yangon Ko Than

Naing

(Mandalay)

02-33871 No. 54,26(B)

Street, 88th & 89th

Street, Mandalay

39 | P a g e

No. in

MMFA

list

Type of

Compay

Company

Name

City Vs Region

(in mandalay)

Gender Business

Sector

Loan Size

(MMK)

Minimum

Loan Size

(MMK)

Maximum

Loan Criteria Duration of

Loan

Annual

Interest Rate

Payback

Schedule

Payback type Savings(Y/N)-can

people save with the

organisation?

Group Vs

Individual

Group Vs

Individual

(Regulation)

Type of Loan (Group/Individual)- names of the

laons and what are they?

Microinsurance (Y/N) Head Quarter

Info.

Contact

Detail

Contact Number Address Note

29 Private Firm IBK Capital

Myanmar

Regional Female All 200,000 5,000,000 Need to show own business and related

all registrations

1 yr 30% per year Once in 14

days

CO will go and

collect at

group

meeting place.

Only need to save 5%

for the first time of

loan amount.

Group Group

- Members must

live related local

area

- At least 25

members in a

group

- Members are

acceptable until

40 people in a

group

Group Lending

- First time (200,000 - 400,000)

no Insein Mandalay -

Amayapuya,

Chan Aye

Thar San,

Pathein Gyi

Amayapuya -

Daw Kyi Kyi

Naing Maw

(Manager)

09-424424478 kun Thi Tan Street,

Yat Kan Taw, Man

Tan Ward,

Amarapuya

Township.

30 Company BG

Microfinance

Myanmar

Regional Female - 300,000 1,000,000 Members must guarantee each other

that they live related local area, and also

a leader must guarantee for 45

members.

* If one member run away, the rest of

two members must repay for that

people.

* If happened over 5 members, The rest

of the group must repay for those

people.

6 months 30% per year Once a week CO will go and

collect at

group

meeting place.

Only need to save 5%

for the first time of

loan amount.

Group Group

- Members must

live related local

area

- At least 5

members in a

group and must

have 5o

members in a

related local area

Group Lending

- First time 300,000 ks (6 months)

- If people had good recording on repayment after 6

months, they can get 400,000 ks.

- And also recording on repayment is going through

well after a year, can get up to 700,000 ks.

Yangon Mandalay -

Still only is in

Pathein Gyi

Twonship

Taung Gyi -

Ko Than

Htwe

(Manager),

Pathein Gyi -

U Nay Lin

Tun Aung

Ygn - 09977102112

Taung Gyi -

09969948086

Pathein Gyi -

09797312343

Pathein Gyi Main

Road, Yay Htwet

Street, Gaw Ta Mi

Street.

31 Company Advans MFI

Myanmar

Regional Female - 300,000 1,500,000 Members must guarantee each other

that they are the right people on living

around related area. And also husband

or one neighbor must gurantee that she

is the right people and good history.

* Negotiable

for 6 months or

10 months

(Group loan)

* 1 yr

(Individual Loan)

30% per year Once in a

Month

CO will go and

collect at

group

meeting place.

Both Both

*Group ( 3 - 6

members must

be)

* Group Lending (300,000 - 1,500,000)

* Individual Lending ( Need to fill the form first, and

then related Manager will go and check the own

things. After all, they will give loan is available for

them)

no Mandalay Mandalay, -

Pathein Kyi, -

Amarapuya

9760824270 36 street, Between

81 and 82 ,

Mandalay.

32 Company JA Capital or

JB capital

Regional Female All 200,000 2,000,000

(Current)

Members must guarantee each other

that they live related local area, must

have own household paper and own

house.

* Need to show any business which

small or big for the first loan.

* Need to show good business for the

second loan.

1 yr 30% per year Once a

month

CO will go and

collect at

group

meeting place.

- Group Group (3

members in a

group)

Group (5

members in a

group) Note:

Must have 8

groups by 40

members at

related area

* Group Lending with 3 members (200,000 first

loan) NOTE: after all repayment , next loan will be

getting double continuously.

* Group Lending with 5 members (500,000 - 200,000)

Yangon Mandalay;

Chan Mya

Thar Si, Pyi

Gyi Ta Gon,

Pathein Kyi

Chan Mya

Thar Si , Ko

Thi Ha

(Manager)

9420091926 Address is not

stable yet.

* Chan Mya Thar Si

in progress

* Pyi Gyi Ta Gon

(will start running

1st May)

* Pathein Kyi (will

start running 1st

Jun)

33 Company TUTU Finance-

WCI Myanmar

Regional Female - 300,000 - * Need to show NRC, household paper

and photos.

1 yr 30% per year Once in 14

days

CO will go and

collect at

group

meeting place.

Only need to save 5%

for the first time of

loan amount.

Group Group(4- 8

members)

* Group Lending Yangon Mandalay-

Pathein Kyi,

Chan Mya

TharSi

022000219 #8, Block -6,

Flower Street,

Mingalar

Mandalay, Chan

Mya Tharsi

Township,

Mandalay City ,

Myanmar.

* It is start running

the services , but

has a plan for

individual loan later.

34 Intl. Sathapana Co

Ltd

300,000 5,000,000 Age 18 already,

Must be a good morality,

Must have other income source,

Not doing illegal business,

Women are most priority ,

Not be a MFI staff

Will not move address

Have good repayment capacity

1. Copy of national registration card

(NRC)

2. Copy of household registration card

3. Residential address acknowledgement

letter

4. Borrowers' photo (Optional)

Group and

Individual loan -

4-12 months

30% once / month Group loan (from 100,000 -700,000 kyat)

Individual loan (from 800,000 - 2,000,000 =1st time,

800,000 - 5,000,000 kyat= 2nd time)

73rd Street

Bet: 35th and

36th Street,

Mahaungmya

Tsp

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Annex 4: Description of the Women organisations involved with FCFW (translated) Organisation name

Man Thingaha (Gender Based Violence Action Team)

Shining Women Mandalay Social Science Institute

Smile Education & Development Foundation (Mandalay)

Say Ta Nar Mon

Established in what Year?

2016 2015 Jul-15 2007 2008

What does the organisation do as activities?

Organization is providing training, related to Gender, Awareness, Women' right and Laws for protection women.

Providing Knowledge and skills to lead with confidence for women in vocation training.

Giving training like Political, Business, Social Science and also it is linking with Sweet Contact for hospitality services training.

Human Right, Women Right, Life Skill (Women Empowerment, Hotel Training, Vocational Training, English Learning Class, Computer Training), Capacity Building Training, Freedom of Religious and Belief/ Interfaith/ Peace Process.

This Organization is working together with National AIDS Program for HIV/AIDS, and cooperation with SPECTRUM for developing women and children. For developing women and children, child protection group, Community-based organizations, child protection police group and Anti-trafficking police group, Social and Health volunteers are being implemented in cooperation with it. It is cooperation with various organizations for developing people. Members are living in 7 townships of Mandalay, therefore, members can link with related their township and division. The executive group is taking responsibility for the group to be long-term working and to receive regular income.

41 | P a g e

What type of support do you give to women and their small businesses?

Providing Training to people who are interested in “low chemical products” such as, Facial Soap, Washing Soap, Cleaning Soap, and Shampoo, making dry flowers, decoration flowers with vase and florist decoration.

Agreement with the women, who collect contribution and provide to low standard women and married women.

We did survey of Women's life safety and Business sector, which we reported to CEDAW committee. And then we do consulting and giving training to develop skills and knowledges.

Giving Training - flowers decorations with creative designs to reach the market, and also knitting any types and sell in a market.

It is providing investment, linking with technology training provider, linking with building a capacity building training centre. According to their current agreement, they are giving loan only to members. But they don't have enough money to give loan. Only in emergency case and when there is an opportunity for members can they give more loans than the policy of the organisation.

Are you supporting women with microfinance? If yes how?

No No No No Yes, giving loan to members and getting back the interest are supported to Women and children. Only giving loan to women and they have to do repayment at specified date. It has members meeting after 6 months, at that time they discuss and implement as they planned. In case, emergency case was happened, the executive group do meeting and discussion. For every regulation and policy related to loan , all members' agreement. And then, It is only for women must be a

42 | P a g e

member.

What type of support do women and small businesses need?

Need more Investment, need market for distribution and need to teach technology

Providing handicraft training and more teaching materials for the women to get income.

Need more Investment, need market for distribution and need to teach technology

Need more investment, and need to find out the market for Handicrafts.

Need more investment and need to support technology and related training with their business. It should provide to learn opportunity for them. (For ex, arranging meeting for exchange their information and involving awareness raising activities. So that, they can learn and share.)

What type of loan do you think women need?(Especially for the handicraft)

Need enough Investment with less interest

To provide more teaching materials and to get handicraft market. Depends on microfinance service loan payment.

- I think if it gives loan with interest which needs to be low interest (or) if it supports for their capital of handicrafts, It will be the best.

Need investment for non- business, business. As well as investment for hiring the employee for setting up the new business.

What size and what conditions?

It needs to give enough investment to be able to work like cottage industry for low income family.

To do handicraft business It will be preferred getting double of current investment.

It needs to get enough investment and to be able to work for the jobless women and low income families.

* For small business >> 300,000 ks * For increased cash for current business >> 500,000 ks * For the business where needed work many people >> 1,000,000 ks

43 | P a g e

Would you be interested in expanding your present program to include working with women and small handicraft businesses in Thingazar creek?

Yes, I am interested in it.

I would like to cooperate for expanding this current activity.

Yes, I am interested in it.

Yes, I am interested in it.

I am interested in working with. And also need to raise them. But there will be risks. (For ex, the situation of current business, they are being migrant and the situation of their taking responsibilities on their assign….) I am more interested in improving and expanding to current plan. And also it has difficult for women to running well their business by getting fewer loans.

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Annex 5: Myanmar Country Brief, UNCDF 2018

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Annex 6: Myanmar Financial Inclusion overview, UNCDF 2018

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Annex 7: BRAC fact sheet 2017 (from BRAC website: http://www.bracinternational.nl/en/where-we-work/myanmar/)

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Annex 8: BRAC graduation model BRAC - THE ULTRA-POOR GRADUATION APPROACH31 Description by BRAC from their website: “Though the extreme poor live on less than $1.90/day, the ultra-poor are the lowest earning and most vulnerable subset of this population globally. This further and marginalised subset of the extreme poor often lack access to even basic social safety nets or support from government and NGO services. In 2002, BRAC pioneered the Targeting the Ultra-Poor programme to address this need. Adapted by numerous organisations and scaled in some of the poorest regions of the world, the Graduation approach has gained international recognition, and continues to gather momentum, as a means of enabling participants and their families to build secure, sustainable and resilient livelihoods while gaining the skills and confidence to move forward with hope. Graduation combines support to address immediate needs of participants with longer term investments in life skills and technical skills training, asset transfers, enterprise development, savings and planning for the future to transition ultra-poor families into sustainable livelihoods. By addressing the social, economic and health needs of families simultaneously, these programmes provide holistic support to participants as they climb the ladder of economic self-reliance into a sustainable future. The multidimensional and nuanced problems of the ultra poor — food insecurity, poor health, social stigma, limited skills, assets or savings — require an approach that is comprehensive, long-term and substantive enough to empower the ultra-poor to engage with markets and their own communities and graduate from extreme poverty. PROFILE OF THE POOREST Largely disconnected from markets, the poorest of the poor are invariably not covered by social protection programming, or the efforts of local or international NGOs. Even when they are, they are often unable to secure sustainable livelihoods that can provide food security and basic levels of consumption beyond the duration of those programmes. The population considered ultra poor depends on the local context. BRAC strongly believes that poor and vulnerable households can and must be equipped to do more than just cope. Interventions must be carefully planned to build their skill sets and asset base as well as their confidence and social capital (i.e. community inclusion, gender empowerment, etc.) so they can remain food secure, lead sustainable economic lives and ultimately become more resilient.

31

http://www.bracinternational.nl/en/what-we-do/ultra-poor-programme/

49 | P a g e

The graduation program follows an in depth preparation phase whereby BRAC (and others) work together with the communities to do some more market analysis and identification of the pilot clients. Identifying in depth what assistance these groups need in terms of increasing assets and food security, increasing health and social capital as well as increasing skills, savings and financial inclusion.

Specially Targeted Ultra-Poor (STUP): The most destitute ultra poor, who lack access to any productive assets or safety nets receive physical productive assets, life skills and technical skills training, weekly stipend, regular home visits, tailor-made health care and community support. The Other Targeted Ultra-Poor (OTUP): Participants considered marginally less deprived than the STUP, but still firmly among the ultra poor, receive a soft loan for the equivalent of the major portion of the asset required to start their enterprise, in addition to all other components of the programme. Though rigorous research remains to determine the relative impact of soft microfinance loans, more than a decade of BRAC programming points to soft loans as a potential avenue for introducing ultra-poor populations to a gradual repayment mechanism that may build a bridge to microfinance and other services. This represents tremendous opportunity for implementing organisations to undertake further research that might lead to more cost-effective and scalable replication of Graduation programming globally. The graduation approach brings together several components that have proven necessary for sustained upwards economic mobility for the poorest and most vulnerable. It begins with consumption assistance (food and/or cash assistance), mindful that part of what it

means to be extremely poor is the food insecurity that inhibits households from taking on any meaningful longer-term livelihood strategy. This is typically offered through a pre-existing government safety net program (e.g., cash transfer, public works program).

With these basic needs met, participants then gain access to financial services with basic financial education and support in saving money. Savings with a formal, or community-based, financial institution are a vital tool for risk management. Regular savings help build assets, instil financial discipline, and strengthen cash and financial management skills. Participants also get simple

50 | P a g e

technical skills training and seed capital grants (or in-kind assets such as livestock) to jump-start small businesses. In some cases, especially in urban and periurban areas, participants are linked to employment opportunities instead.

Finally regular, intensive one on- one mentoring over the program duration of 24 to 36 months helps build participants’ confidence and the persistence necessary to stay on the trajectory of improved social and economic well-being.

A visual of the selction criteria and the interventions linked to it.”

Note: CGAP-Ford Foundation pilots adopted only the productive asset-based approach (STUP) and not the soft loan approach (OTUP) variation of Graduation.

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Annex 9: Other Financial developments Other relevant changes in the Financial Sector as a whole are summarised in: A: "The Myanmar Business Guide PWC, Fifth edition, October 2017" which mentioned the following32: “In 2016, the government and CBM took steps to reform and develop the financial services environment and framework. On 26 January 2016, the Financial Institutions Law 2016 was enacted. This resulted in four new

foreign bank branch licences being issued, and the first company to be listed on the YSX for trading (which was official launched in December 2015).

On 30 March 2016, the CBM issued the Regulation on Mobile Financial Services to widen the market to include non-banking financial institutions. The market had previously been limited to banks only.

Following this, on 3 October 2016, CBM granted the country’s first mobile financial services licence to Wave Money, a mobile money-transfer joint venture between Norway’s Telenor, Myanmar’s Yoma Bank and First Myanmar Investment. It was also reported that Myanmar’s largest telecom, Myanmar Post & Telecommunications, aims to launch its own mobile financial service, MPT Mobile Money, sometime this year

On 23 September 2016, an official in the Financial Regulation Department under the MOPF said that the government would speed up the liberalisation of the insurance sector, allowing foreign players to enter and removing restrictions on local firms on their product offerings in 2017.

The very first crop insurance scheme is going to be piloted for rice, starting this season 201833, offered by Global World Insurance, this could be a game changer for millions of paddy farmers.

The Myanmar Central Bank divides mobile-based financial services into two categories: mobile banking and mobile financial services. Initially the CB ruled that all financial services had to be delivered through a traditional bank and a bank account (the 2013 Mobile Banking Directive).

o But after the Financial Institutions Law was enacted in January 2016, the Central Bank issued a Regulation on Mobile Financial Services (MFS) on March 30, 2016, which stated that in order to create an enabling regulatory environment for efficient and safe mobile financial services in Myanmar it would allow mobile network operators and non-bank financial institutions to apply for a mobile financial service licence, but the CB also set some stringent rules on these operations to protect customers and the integrity of the financial services sector. Under the MFS regulation, individual account holders can deposit up to 1,000,000 kyat and transfer up to 200,000 kyat per day and 5,000,000 kyat per month.

B: KBZ Bank - Action Aid (INGO) – Whereby both parties work together to deliver loans to female agricultural producers. It was launched in Feb 2018. For a period of 12 months implementation, ActionAid provides the collateral to underwrite the credit34. The pilot works in Pakkoku Tsp with 120 female farmers. In total KBZ will hand out loans worth 100,000,000 kyat for the project; individual borrowers can borrow between 1-1.5 million kyat, with an annual interest rate of 13%, to be paid every three months. The loans can be used for different phases of the value chain, to increase productivity and improve quality, and possibly similar programs could be developed for the handicraft sector together with ADB.

32

http://myanmar.pwc.com. 33

Crop Insurance to protect paddy farmers available soon, Myanmar Times, Thiha Ko Ko,Friday 20 april 2018 34

https://www.mmtimes.com/news/kbz-bank-offers-loans-female-cultivators-magwe.html, By Htin Lynn Aung 23 Feb 2018

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Annex 10: WAVE pricing Pricing: Wave

Account to Wave Account:

Wave Shop to Wave Shop Transfer:

Wave Shop to Wave Account Transfer:

Cash Withdrawal:

Wave Account to Wave Shop:

Transferring money from your Wave Account to another Wave Account

Transferring money by visiting any authorized Wave Shop to any customer with a valid legal picture identification (NRC, Passport, driving license etc)

Transferring money by visiting a Wave Shop to Wave Account user who can withdraw money->by visiting any authorized Wave Shop

To retrieve money from your Wave Account by visiting Wave Shop

Transferring money from your Wave Account to any person with valid legal picture identification (NRC, Passport, driving license etc)

Amount Transfer (Kyat) Price (Kyat) Price (Kyat) Price (Kyat) Price (Kyat) Price (Kyat)

1 – 10,000 200 400 400 300 400

10,001 – 25,000 350 700 700 600 700

25,001 – 50,000 450 1,000 900 800 900

50,001 – 100,000 700 1,500 1,400 1,200 1,400

100,001 – 150,000 900 2,000 1,800 1,600 1,800

150,001 – 200,000 1,150 2,500 2,300 2,000 2,300

200,001 – 300,000 1,400 3,000 2,800 2,400 2,800

300,001 – 400,000 1,750 4,000 3,500 3,200 3,500

400,001 – 500,000 2,000 4,500 4,000 4,000 4,000

500,001 – 600,000 2,350

600,001 – 700,000 2,700

700,001 – 800,000 3,000

800,001 – 900,000 3,350

900,001 – 1,000,000 3,700

Money Transfer receiving free

Wave Account Services:

Cash In FREE

Balance Enquiry FREE

Mini Statement FREE

PIN Change FREE

Account opening fee FREE

Annual account fee FREE

Bill Payments:

YESC 500 MMK

MPT 500 MMK

53 | P a g e

20- <30 30-<40 40-<50 50-> Sometim

es

Yes

Amayapuya Longyi shop 1 1 1

Clothes Seller at Zay Cho Market 1 1 1

Clothing shop 1 1 2

Cold Drinks Shop 1 1 1

Farming Vegetables Plantation and Selling 1 1 1

Flower Shop 1 1 2

Housewife Individual Weaver (2x) 1 1 2 3

Lotus Flower Shop 1 1 2

Myanmar Pattern Printed Longyi Seller At Zay Cho Market 1 1 2

Putin Seller at Zay Cho Market 1 1 2

Seasonal Fruit Seller 1 1 3

Sewing at home 1 1 2

Shan food shop 1 1 2

Shan Noodle Shop 1 1 1

Souvenir Clothing Shop 1 1 2

Souvenir Handicraft Shop 1 1 1

Souvenir Shop 1 1 1

Teacher from Saungdar Waving Schools 1 1 2

Thanaka Root Seller 1 1 1

Grand Total 2 6 10 2 3 17 32

Age How

many

business

do they

have?

Do you get loans?Type of Businesses (sample of 20)

Annex 11: Summary tables of the Interviews with women and small businesses The FCFW project has not yet identified an actual target group, for the MFI research a proxy group was interviewed to identify finance demands for female small business owners anyway, as an indication for what the FCFW target group might need in the future. For this random interviews with 20 female small business owners in Mandalay city and in Amarapura town (the latter to be able to interview weavers, as a part of the handicraft sector) took place. The characteristics of the women involved in the short interviews are described below, most are selling products (while some are also the producers of these products). Most were between the age of 40-<50, most have loans and most (only 8 out of 20 not) have more than 1 business that they are involved in, with other family members or with their spouse.

Figure 9 Characteristics of the respondents - women business owners

The reasons to need a loan vary a lot, buying raw materials, expanding the business would be the expected answers as loans are generally handed out for that reason. However people were very frank and also mentioned that they used it to give a s a donation, for an emergency or to cover losses

54 | P a g e

Tat Toe

Aung

Compan

y

?

(Forgot)

Advans Allianc

e

Fullerton Market

Money

lender

Vision

Fund,

Alliance &

Fullerton

Vision

Fund, Tat

ToeAung

&

Alliance

Visionf

und

Vocation

al School

Yone Kyi

Htike

Thaw

Khon Arr

Co.Ltd

Grand

Total

Amayapuya Longyi shop

to pay the upfront rental fees for shop 1 1

Clothes Seller at Zay Cho Market

use all sales money to reinvest -> then need some money

to eat

1 1

Clothing shop

use loan to expand 1 1

Cold Drinks Shop

use loan for emergency 1 1

Farming Vegetables Plantation and Selling

use loan to expand 1 1

Flower Shop

use loan to pay for education 1 1

Housewife Individual Waver

use loan to expand 1 1

use loan to pay for education and donation 1 1

Lotus Flower Shop

use loan to build a house 1 1

Myanmar Pattern Printed Longyi Seller At Zay Cho Market

use loan to expand 1 1

Putin Seller at Zy Cho Market

One of their businesses needs investment to buy raw

material -> they repay loan with other business

1 1

Seasonal Fruit Seller

use loan to cover losses 1 1

Sewing at home

use loan to pay for education 1 1

Shan food shop

use loan to do donation and family health care 1 1

Shan Noodle Shop

use loan to expand 1 1

Souvenir Clothing Shop

topay the upfront rental fees for shop 1 1

Souvenir Handicraft Shop

use loan to do donation 1 1

Souvenir Shop

topay the upfront rental fees for shop 1 1

Teacher from Saungdar Waving Schools

do some other business 1 1

Thanatkhar Root Seller

working capital -> not expanding 1 1

Grand Total 1 1 1 1 2 8 1 1 2 1 1 20

Use of the loan per finacial service providerType of Business

Figure 10 Finance demand versus type of micro finance service provider

Looking at whether specific "needs" were directed or satisfied by specific finance providers, there

does not seem to be a pattern, however this is an extremely small sample. Figure 11 Finance service providers against the reason for the loan/ by the respondents

to start

another

business

to

buy

raw

mate

rial

for

other

busin

to pay

the

upfront

rental

fees for

shop

use all

sales

money

to

reinvest

-> then

need

some

money

use loan

for

emergen

cy

use loan

to build

a house

use loan

to cover

losses

use loan

to do

donation

use

loan

for

family

health

care

use loan

to

expand

use loan

to pay

for

educatio

n

Grand

Total

Amayapuya Longyi shop 1 1

Clothes Seller at Zay Cho Market 1 1

Clothing shop 1 1

Cold Drinks Shop 1 1

Farming Vegetables Plantation and Selling 1 1

Flower Shop 1 1

Housewife Individual Weaver (2x) 1 1 1 3

Lotus Flower Shop 1 1

Myanmar Pattern Printed Longyi Seller At Zay Cho Market 1 1

Putin Seller at Zay Cho Market 1 1

Seasonal Fruit Seller 1 1

Sewing at home 1 1

Shan food shop 1 1 2

Shan Noodle Shop 1 1

Souvenir Clothing Shop 1 1

Souvenir Handicraft Shop 1 1

Souvenir Shop 1 1

Teacher from Saungdar Waving Schools 1 1

Thanaka Root Seller 1 1

Grand Total 1 1 3 1 1 1 1 3 1 6 3 22

Type of Businesses Why did you need a loan?

55 | P a g e

National

ID

Househol

d Copy

Photo Nothing,

They

know

me well

Shop

rental

agreeme

nt

Recomme

ndation

letter

Visit my

house/

shop /

village

2 weekly Daily Monthly weekly

Amayapuya Longyi shop 1 1 1 1

Clothes Seller at Zay Cho Market 1 1 1 1

Clothing shop 1 1 1 1

Cold Drinks Shop 1 1

Farming Vegetables Plantation and Selling 1 1 1 1

Flower Shop 1 1

Housewife Individual Weaver (2x) 2 2 2 2

Lotus Flower Shop 1 1

Myanmar Pattern Printed Longyi Seller At Zay Cho Market 1 1

Putin Seller at Zay Cho Market 1 1 1 1

Seasonal Fruit Seller 1 1

Sewing at home 1 1 1 1

Shan food shop 1 1

Shan Noodle Shop 1 1

Souvenir Clothing Shop 1 1 1 1

Souvenir Handicraft Shop 1 1

Souvenir Shop 1 1 1 1

Teacher from Saungdar Waving Schools 1 1

Thanaka Root Seller 1 1

Grand Total 10 6 2 8 4 1 9 1 7 10 2

Repayment Schedule?Type of Businesses Paperwork needed to get a loan?

Figure 12 First loan size

The paperwork that is needed to receive a loan varies from "nothing" for the money lender, as the

people are well known to the money lender and they have a shop in the market, and in cases of fraud the moneylender is able to find them and embarrass them. To copies of NRC, household book, rental agreements and recommendation letters

The repayment schedules are reasonably flexible, with the moneylender being the most flexible (the money lender also walks around on the market).

Figure 13 Paperwork requirements for loans and repayment schedules

The size of the first loan varied a lot from 100,000 to 5,000,000. The larger amounts from 1,000,000

to 5,000,000 were in relation to upfront payment of rent for a shop or the building of a house -> indicating that at least the loanees would stay in the area for a while.

100,000 150,000 200,000 300,000 500,000 800,000 1,000,000 1,500,000 no limit No Answer Grand

Total

Tat Toe Aung Company 1 1

Advans 1 1

Alliance 1 1

Fullerton 1 1 2

Market Money lender 3 1 1 3 8

Vision Fund, Alliance and Fullerton 1 1

Vision Fund, Tat ToeAung and Alliance 1 1

VisionFund 1 1

Vocational School 1 1 1

Yone Kyi Htike Thaw Khon Arr Co;Ltd 1 1

? (forgot name organisation) 1 2

Grand Total 4 1 2 2 1 1 2 2 3 2 20

Type of micro finance What is the size of the loan? 1st loan

56 | P a g e

? 10% 2.50% 3% 5% 5-10% 7% Grand Total

Tat Toe Aung Company 1 1

? (Forgot) 1 1

Advans 1 1

Alliance 1 1

Fullerton 2 2

Market Money lender 1 3 2 1 1 8

Vision Fund, Alliance and Fullerton 1 1

Vision Fund, Tat ToeAung and Alliance 1 1

Visionfund 2 2

Vocational School 1 1

Yone Kyi Htike Thaw Khon Arr Co;Ltd 1 1

Grand Total 1 3 11 2 1 1 1 20

What is the interest percentage per month?Type of Business

Figure 14 Size of the first loan

And finally what is the interest rate per month? This depends on whether respondents took out a

loan with a formal organisation or with a money lender, and in some cases people did not know as they are only aware of how much they have to repay.

Figure 15 Interest rate per month per provider

Tat Toe

Aung

Company

? (Forgot) Advans Alliance Fullerton Market

Money

lender

Vision

Fund,

Alliance &

Fullerton

Vision

Fund, Tat

ToeAung &

Alliance

Visionfu

nd

Vocational

School

Yone Kyi

Htike

Thaw

Khon Arr

Co.,Ltd

Amayapuya Longyi shop -

topay the upfront rental fees for shop 1,000,000 1,000,000

Clothes Seller at Zay Cho Market -

use all sales money to reinvest -> then need some money to eat 100,000 100,000

Clothing shop no answer -

use loan to expand -

Cold Drinks Shop -

use loan for emergency 100,000 100,000

Farming Vegetables Plantation and Selling -

use loan to expand -

Flower Shop -

use loan to pay for education 800,000 800,000

Housewife Individual Waver -

use loan to expand 300,000 300,000

use loan to pay for education and donation 150,000 150,000

Lotus Flower Shop -

use loan to build a house 5,000,000 5,000,000

Myanmar Pattern Printed Longyi Seller At Zay Cho Market -

use loan to expand 100,000 100,000

Putin Seller at Zy Cho Market -

One of their businesses needs investment to buy raw material -> they repay loan with other business 200,000 200,000

Seasonal Fruit Seller -

use loan to cover losses 100,000 100,000

Sewing at home -

use loan to pay for education 200,000 200,000

Shan food shop - -

use loan to do donation and family health care no limit -

Shan Noodle Shop -

use loan to expand 1,000,000 1,000,000

Souvenir Clothing Shop -

topay the upfront rental fees for shop 1,500,000 1,500,000

Souvenir Handicraft Shop -

use loan to do donation no limit -

Souvenir Shop -

topay the upfront rental fees for shop 1,500,000 1,500,000

Teacher from Saungdar Waving Schools -

do some other business 300,000 300,000

Thanatkhar Root Seller -

working capital -> no expanding 500,000 500,000

Grand Total 1,000,000 1,000,000 ###### 1,500,000 1,700,000 6,600,000 200,000 - 150,000 300,000 100,000 12,850,000

Type of Business Financial Service providers Grand Total