Wednesday, January 22, 2020

Myanmar invites foreign investment in microfinance

Jul 23. 2019
Phyu Yamin Myat, general secretary of Myanmar Microfinance Association, at the Microfinance Success Asia event in Yangon on July 23 (Photo- Khine Kyaw, The Nation)
Phyu Yamin Myat, general secretary of Myanmar Microfinance Association, at the Microfinance Success Asia event in Yangon on July 23 (Photo- Khine Kyaw, The Nation)
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In response to growing investors’ interest in Myanmar’s finance sector amid on-going market liberalisation, key players in the microfinance industry gathered on Tuesday at an event in Yangon, the nation's hub of commerce.

Phyu Yamin Myat, general secretary of Myanmar Microfinance Association, told the first-ever Microfinance Success Asia event in the country that foreign businesses are keen on entering this “huge market”.

“Many investors are aware of the huge opportunities. Myanmar’s microfinance sector is competitively young but is growing very fast,” she said.

“This is where we are right now. We have to grow fast because our country has a very high demand for this service [microfinance].”

She said, currently, there are more than 3.4 million clients in the microfinance sector with a total loan portfolio of nearly US$350 million.

“You can imagine how stressful it is [to manage the big market]. Our employees are overloaded, executives and management are constantly under pressure,” she said.

“Microfinance is not only about providing finance solutions or loans to our customers; it is also about guiding them to a sustainable business operation and income generation.”

She said all stakeholders must strive for fast growth as it would have to support 25 per cent of Myanmar’s population who are living below poverty line.

“We are facing increasing challenges and pressures that we believe can be solved with technology. We are delighted to partner with HBZ Events to host this event to facilitate an exchange of knowledge and discussions on the latest technology solutions for the sector in Myanmar,” she said.

Gonzalo González A, chief executive of DAWN Microfinance said Myanmar has done very well promoting financial inclusion since it introduced the Microfinance Law in 2011.

“I believe the next stage of microfinance industry development will be to encourage partnerships among different actors to provide services to low income segments and small businesses in Myanmar,” he said.

“Through panel discussions, we analysed the benefits of different microfinance models as well as lessons learned from other markets which can be studied for future policy reforms in Myanmar.”

The event brought together Myanmar's government officials and representatives from the inclusive finance arena: microfinance institutes (MFIs), SME and entrepreneurship promotion agencies, banks, farmers associations, technology companies, consultancy companies, financial cooperative experts, development partners as well as policy makers and regulators.

It provided an opportunity for delegates to engage in professional exchanges and to form networks between players from all sectors of the industry.

Herman Zaidin, managing director of HBZ Events, said both local and regional microfinance industry stakeholders now have a platform to learn, network and synergise for the advancement of microfinance solutions and operations to bring more impact to the lives of millions.

Said Syed Mamnun Quader, group managing director of Southtech, said the firm has been supporting MFIs and the development banks to improve the lives of millions by providing them with the right tools, technology, advice and training since 1996. He encourages stakeholders to explore ways to grow their business in the region.

“We have enabled them to be highly efficient and cost effective. More than a million people have already benefited from our solutions in Myanmar alone and having established our full-fledged office in Yangon for the past five years, we are well-placed to help MFIs in Myanmar grow and prosper ,” he said.

Cameron Goldie-Scot, chief executive of Musoni, said there is now a huge opportunity for MFIs to leverage technology, improve efficiency and expand outreach in Myanmar.

“We discussed different ways that MFIs can go digital, and shared our case studies that highlighted how Musoni, with our local partner ThitsaWorks, supports some of the largest MFIs in this country,” he said.

With 8.8 million of the population in Myanmar owning a business, 56 per cent of the enterprises do not have a savings/checking account and only 7 per cent of small enterprises have a line of credit. According to a study by United Nations Capital Development Fund, 52 per cent of businesses identified access to finance as an obstacle.

Alison Grun, regional director for Asia Pacific of Software Group, said microfinance is thriving in Myanmar, offering a means of leverage to MSMEs to grow their potential and push the country's economy forward at the same time.

“We are working with Fullerton Finance Myanmar and Early Dawn Microfinance to help more MFIs address the evolving needs of customers in terms of convenience,” he said.

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