MICROCAPITAL.ORG STORY: Burmese Military Authorities Plan First Microfinance Lending Program on Burma's Western Border

Narinjara News, an internet news service run by democratic activists from Arkan State, Burma, reported plans of Burmese Military Authorities to launch the first microfinance program in Maungdaw, the westernmost part of Myanmar, Burma [1]. According to a past MicroCapital story, extensive lending in Myanmar has been limited, likely because of the region’s “unfavourable political environment stemming from the country’s military dictatorship” [2].

Hirohisa Yukawa, author of The Role of Microfinance NGOs in a Military Governed Country, explains that current Burmese microfinance programs are limited to three districts, the Delta Region (Irrawaddy), the Dry Zone (upper Burma) and Shan State, reaching about 5 percent of Burma’s population [2]. These programs operate under the United Nations Development Programme (UNDP) in collaboration with the United Nations Office for Project services (UNOPS) [3]. The new program in Myanmar, however, will operate under the Burmese military, according to the Narinjara news release.

The program will be financed by Burma’s Ministry of Cooperatives. Loans will average USD 30, says an official from the Maungdaw Township Council Office [1]. Loan guidelines require that borrowers form a group of five people. The official stated that over 40 such groups have registered with the office so far to partake in the microfinance program.

According to the loan guidelines, anyone defaulting on his/her loan for three consecutive days will be permanently dismissed from the program. One local businessman says that some people have applied for the loans with the hope of surviving the current poverty crisis; however, others “shun the program” as it relates directly to local authorities [1].

A MicroCapital story explains that Myanmar’s unstable political situation has aggravated economic conditions not only in the region itself, but also in border areas such as Thailand. As such, the Japanese Government gave USD 84, 000 through its embassy in Thailand for a microcredit initiative on the Thailand-Burma border [4]. For more information on this initiative, please visit https://www.microcapital.org/microcapital-story-japan-gives-usd-84000-to-support-microcredit-on-the-thai-burmese-border-through-the-grassroots-human-security-projects-scheme/.

By: Diya Chopra, Research Associate

Bibliography:

[1] Narinjara News

http://www.narinjara.com/details.asp?id=2384

[2] International Society for Third-Sector Research: The role microfinance NGOs in a military governed country: A case study in Myanmar. Hirohisa Yukawa.

[3] Fiery Dragons: Banks, Moneylenders, and Microfinance in Burma. By Sean Turnell.

http://books.google.ca/books?id=nxb9fwtVUcwC&pg=PA320&lpg=PA320&dq=undp+%2B+unops+%2B+burma+microfinance&source=bl&ots=J83OY3-IAI&sig=teBL0kXYAcBK3ZaXqpR8obY6Jf4&hl=en&ei=xB7nSt3KH9PmlAfJrIGOCA&sa=X&oi=book_result&ct=result&resnum=1&ved=0CAsQ6AEwAA#v=onepage&q=undp%20%2B%20unops%20%2B%20burma%20microfinance&f=false

[4] Embassy of Japan in Thailand

http://www.th.emb-japan.go.jp/en/jis/2009/0921.htm