US kicks off loan guarantee scheme for Myanmar

An agreement was signed between USAID and five microfinance institutions - ASA Microfinance (Myanmar), LOLC Myanmar Micro-Finance Company, Myanmar Development Partners, Pact Global Microfinance Fund, and Proximity Designs. 

“State Counsellor Aung San Suu Kyi’s visit to the US illustrated the strong and growing friendship between Myanmar and the United States. The United States is committed to supporting the people of Myanmar and their new government in their pursuit of inclusive economic growth and development," said US Ambassador Scot Marciel.

The scheme targets micro, small, and medium-sized businesses working in the agriculture sector, including farming, livestock, manufacturing, trade and services. It is estimated that the agreement will help over 5,000 borrowers, the majority of which are women-owned enterprises, access larger loans (up to $5,000, compared to the current average loan size of $200), enabling them to grow their businesses and hire more workers.

The programme will be accompanied by technical assistance to both the microfinance institutions and the government to ensure responsible and effective lending. On August 29, the Financial Regulatory Department (FRD) in the Ministry of Planning and Finance, released new and groundbreaking directives for microfinance lending that allow microfinance institutions to expand their lending through deposit taking and borrowing from domestic commercial banks. This progressive regulatory change will significantly contribute to economic growth in every state and region.

In a joint statement released on September 14, Obama and Suu Kyi announced a US-Myanmar Partnership to mark a new era in the

relationship between the two countries. The statement identified a number of commitments, including the loan guarantee to support over $10 million in loans to small businesses in Myanmar.