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Introduction
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Fahmid Karim Bhuiya
Chief Operating Officer
Since 1997, Pact has been implementing microfinance activities in Myanmars Dry Zone, Shan
State, and in the Ayeyarwaddy Delta Region since
2006. Today, with a loan portfolio of $68 million,
these activities comprise the largest microfinance
program in Myanmar and one of the 30 largest in
Our Approach
Pacts approach aims to alleviate long-term poverty through the development of three essential
resourcesfinancial, institutional and human
capitaland is the foundation of our microfinance
methodology.
To establish the habit of making payments, Pact
requires clients to deposit a small amount of savings on a biweekly basis before taking any loans,
with the option to contribute additional voluntary savings. The MF pays 15% annual interest
on savings and charges 2.5% monthly interest on
loans, while local moneylenders typically charge
5-15% monthly.
MF clients form groups of five members each.
These groups elect leaders and manage their flow
of loans and savings. Approximately 10 groups
make up a village-level center, which also elects
their own leaders. Pact ensures borrowers have
Pact is an international, nonprofit organization with forty years of experience. Our vision is a world where those who are poor and
marginalized exercise their voice, build their own solutions, and take ownership over their future.
(78.2% of responses), while non-clients borrow primarily from family and friends (70.2%) and money lenders
(21.2%). That clients are able to borrow relatively less
from money lenders is of particular note because of the
high interest rates that money lenders charge.
Findings
20%
Client
NonClient
0%
Voluntary Savings
1,000s of Kyats
30
25
20
15
10
5
0
A 2011 UNDP survey collected data on where respondents took non-microfinance loans from, but did not include prevalence of microfinance loans. This means that
it is possible to examine differences in non-microfinance
loan sources, but not overall loan prevalence. In villages
without microfinance programs, 49.8% of respondents
took non-microfinance loans, primarily from moneylenders and friends and family. In microfinance villages,
only 43.1% took non-microfinance loans, a statistically
significant difference (p<.001). These loans came primarily from moneylenders and family members. This
suggests that the existence of microfinance programs
does displace demand for non-microfinance loans.
The differences between the UNDP and USAID branch
data in non-client access to loans may be representative
of regional differences, but might also be representative of differences in the sampling method. The USAID
branch survey includes non-clients and clients in the
same microfinance villages, so self-selection out of the
program may misrepresent the general demand for
At the community level, MF provides women the opportunity for community leadership and financial empowerment. As of June 2012, women from 255 villages
joined the group formation process, practicing local level
leadership and decision making to manage their group
activities; elected 2,944 group leaders and 349 center
chairs; and 84.4% of women who joined the program
had invested in their own income generating activities
deciding on their own investments and business growth.
The UNDP 2011 survey measured womens empowerment through participation in household decision-making. Having decision-making power was defined as
answering that, for key family decisions, either both
husband and wife decide together, that the wife can persuade her husband, or that the wife initiates decisions.
The decisions included sending children to school,
selling crops, and how to manage daily expenses. Not
having decision-making power was defined as always
following the husbands decisions or failing to persuade
the husband on a decision. On all of the family and financial decisions asked about except for daily expenses,
women participating in microfinance programs have a
statistically significant higher degree of decision-making
power (see Table 1). It should be noted, however, that
the plurality of respondents answered for all questions
that both decide, and that the level of self-reported decision-making power is quite high across the board.
Table 1: Percent of women who have household decisionmaking power
NonMicrofinance
microfinance p-value
village
village
Issue
93%
.004
Marriage of children 96%
Sending children to
97%
93%
.000
school
Asset and input
95%
88%
.000
purchases
Selling crops and
95%
89%
.000
selling prices
Donations
97%
95%
.017
Daily expenses
89%
88%
.832
Non-MF
client
pvalue
Food insecure
25.5%
28.9%
.048
1.43
1.31
.000
Number of types of
vegetables served yesterday
1.39
1.32
.015
3.53
4.24
.001
MF
Village
5.25
Non-MF
Village
4.82
pvalue
.000
4.44
3.58
.000
5.49
5.16
.000
6.22
5.72
.000
pact
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Endnotes
1.
Pact microfinance activities in the affected areas resumed in early October 2008. As of September 2012, in
the Delta (Nargis-affected) region:
3.
According to the 2011 UNDP survey, the following differences in housing were found between microfinance and
non-microfinance villages in Nargis-affected townships
(n=600):
78.7% of MF respondents and only 10.0% of nonMF respondents have floors of concrete or wood.
Conclusion