IFC to enhance microfinance options for 'urban and rural poor'

 

“Now is the right time for IFC to bring its substantial experience in developing microfinance markets, and promoting the sustainable expansion of existing microfinance institutions,” Rachel Freeman, IFC Manager for Access to Finance Advisory Program in East Asia and the Pacific, said on Wednesday at the signing ceremony of cooperation agreements between the IFC and three microfinance institutions.

Under the cooperation agreements, IFC will help three leading local microfinance institutions — Pact Global Microfinance Fund, Proximity Designs, and World Vision International — to deliver sustainable services by introducing microfinance best practices, enhancing the capacities of their management and operations, designing financial products and training staff. 

“We believe our assistance to these three institutions will not only enhance their capacities, but also bring a demonstration effect in the market that affordable microfinance services can be delivered in a sustainable manner in Myanmar, ultimately increasing access to finance for both the urban and rural poor,” said Freeman.

Through the cooperation, IFC aims to help expand financial services to the overwhelming majority of micro entrepreneurs whose demand for financing exceeds supply by four times, as found by a recent study conducted by IFC and the Consultative Group to Assist the Poor.

The three non-governmental organisations expressed their delight to be collaborating with IFC to help micro enterprises, who need financing to raise incomes, expand their businesses and create jobs. 

“IFC’s global experience in financial inclusion and our in-depth knowledge of Myanmar will be a winning combination for building our institution and contributing to the development of the microfinance sector in Myanmar,” said James Taylor, chief executive officer at Proximity Designs, whose products and services generate additional income for more than 180,000 rural households across the country.

World Vision International, which has provided microfinance services to the poor in the country since 1998, also mentioned that IFC’s training support will deepen management capacity over the short and long term. 

“This will help to continue quality growth in client outreach and services,” said Neal Youngquist, microfinance programme general manager at World Vision International (Myanmar). 

Among the NGOs which signed the pact today are Pact Global Microfinance Fund, which currently has more than 550,000 active loan clients with over US$ 92 million(Ks 90.89 billion) in outstanding loans. The ogranisation is the oldest and largest microfinance institution operating in Myanmar since 1997.

IFC will also provide support to enhance the capacity of other industry players and help develop a microfinance network that promotes sound and responsible practices, Freeman said.

“Working with the government and financial sector to improve access to finance for small and medium enterprises and to increase financial inclusion through microfinance is one of our priorities in Myanmar.” 

IFC’s first investment in the country helped set up a new microfinance institution, which has provided more than US$3.5 million (Ks 3.46 billion) in nearly 9,000 loans to individuals and micro businesses in just one year. 

In FY13, IFC’s investments climbed to an all-time high of nearly US$25 billion (Ks 24.7 trillion), leveraging the power of the private sector to create jobs and tackle the world’s most pressing development challenges.