Snapshots of Myanmar’s flourishing microfinance market
Low-income female entrepreneurs are using small loans to build a better future
YUICHI NITTA, Nikkei staff writer
YANGON — Ever since Myanmar began transitioning to civilian rule in 2011 and opening up its borders, investor money and advanced technology has been flooding in. One of the big changes accompanying this wave has been the spread of microfinance, or loan services designed to help low-income families start businesses.
Take, for example, a 51-year-old woman who runs a restaurant in north of Yangon. She applied to a microfinance institution for a 400,000 kyat ($295) loan, aiming to use the money to buy fresh mutton from relatives. Her plan is to use the proceeds from the meat sales to purchase more meat and make her weekly loan payments.
The government is a big supporter of microfinance. In 2011, it enacted laws to allow foreign companies and nongovernmental institutions to enter the market. Last year, it relaxed regulations to enable the number of such lenders to grow rapidly.
The practice is not without its problems, however. Some borrowers get buried under multiple debts. A woman in a rural area of Mandalay, in central Myanmar, took out loans from three microfinance institutions. But after two years, her new rice business flopped, just as she found out about her unplanned pregnancy.
With no source of income, she makes ends meet by borrowing money from a loan shark. The four other people who belong to her loan co-signing group — required for receiving money from microlenders — have grown distrustful of her and no longer want her as a member.
For those turning to microfinance, the line between success and failure can be alarmingly thin. But even the most beleaguered women I met tended to share the belief that tomorrow will bring better things.