Myanmar President Thein Sein’s public endorsement in May 2011 for the development of a microfinance sector in the country has triggered interest among aid workers and those already involved in the country’s sprouting microfinance sector.
“The need for credit in the rural economy is substantial,” declared Akbar Usmani, acting resident representative for the United Nations Development Program (UNDP). He estimated the present demand for loans in rural Myanmar at USD 340 million to USD 471 million per year.
A law passed in 1990 prohibited state and privately-owned banks from providing uncollateralized credit. Current microfinance activities in Myanmar are performed on the basis of particular authorizations that are given to microfinance actors by the government. One example of this is US-based nonprofit Pact, which reports 478,000 clients. Other microcredit operations, such as those by the National League for Democracy, which were announced last month in this newspaper, presumably operate in a “gray area.” Details of the proposed regulations have not been released.
In Myanmar, 70 percent of the population resides in rural areas and approximately 26 percent live below the poverty line, according to UNDP’s country-wide survey conducted in 2009 and 2010.
By Hajar Elaalej, Research Associate
About United Nations Development Program (UNDP): The mission of the United Nations Development Program (UNDP) is to provide developing countries with knowledge, experience and resources in line with the United Nations’ Millennium Development Goals (MDGs). UNDP operates directly with national governments in 166 countries as of 2011. Each country office of UNDP contributes to the organization’s annual Human Development Report, which provides a benchmark for development.
Source and Additional Resources:
Irinews.org, June 29, 2011, “MYANMAR: Government open to microcredit expansion”, http://www.irinnews.org/report.aspx?reportid=93093
MicroCapital Brief, May 31, 2011, “Myanmar’s (Burma’s) Banned Opposition Party, National League for Democracy (NLD) to Launch Microfinance Program”, https://www.microcapital.org/microcapital-brief-myanmar%E2%80%99s-burma-b…
MicroCapital Universe Profile: United Nations Development Program (UNDP), https://www.microcapital.org/microfinanceuniverse/tikiindex.php?page=United+Nations+Development+Program+%28UNDP%29
Browse the MicroCapital Universe and add your entry to the wiki at: https://www.microcapital.org/microfinanceuniverse/
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