UNCDF in Myanmar

UNCDF in Myanmar

The Challenge

Of Myanmar's population of 60.9 million in 2013, 39.7 million are estimated to be adults. More than 32% of adults live on less than USD2 per day and 72% on less than USD 10 per day. More than 50% of the population have no access to financial services, 30% are using unregulated services and only 20% have access to regulated financial services. The limited access to regulated financial services not only impose significant costs on poor people given interest rates of up to 240%-a-year compared to up to 36%-a-year for regulated services, but informal mechanisms also offer clients limited protection, less choice and lower returns. The resources of the poor are also not captured in the formal financial system with one of the lowest 10-year average domestic savings rate in the world, constraining both domestic investment while increasing dependence on foreign capital and aid. Progress in expanding the reach of regulated financial markets has been limited by an absence of a clear roadmap and national strategy based on reliable market evidence and data, while years of isolation has led to a highly under-developed financial market infrastructure and human resource capability that are essential to expand services at scale.

How We Are Helping?

In Myanmar, UNCDF is helping to create inclusive financial sectors by providing access to financial services for individuals and micro and small businesses through the Making Access Possible Programme (MAP) and the Microlead Expansion Programme.

The purpose of MAP is to expand financial services for individuals and small businesses by defining the financial inclusion agenda in Myanmar and aligning resources with key priorities, based on a rigorous evidence-based diagnostic exercise concluded by intense stakeholder dialogue and decision making.

The Microlead programme is largely motivated by UNCDF’s wider perspective on combining interventions that expand access over the short term while reinforcing a core approach of developing financial markets over the medium by smartly using subsidies and its lending and guarantee instruments. Myanmar MicroLead is part of a larger program started in 2009 when UNCDF, in partnership with the Bill & Melinda Gates Foundation, initiated a flagship global microfinance programme to provide loans and grants on a competitive basis to microfinance institutions, commercial banks and financial cooperatives based in developing countries and pursuing a savings-based approach to expand operations to underserved markets. The programme’s goal is to reach 525,000 new clients by 2016 at least half of whom are women and at least half of them are rural dwellers.

In Detail

Project

MAP

Goal To support expanding access to financial services for individuals and micro and small businesses.
How

Making Access Possible (MAP) is a diagnostic and programmatic framework to support expanding access to financial services for individuals and micro and small businesses. The MAP framework creates the space to convene a wide range of stakeholders around evidence-based country diagnostic and dialogue and leads to the development of national financial inclusion roadmaps. The roadmap identifies key drivers of financial inclusion and includes specific actions that will contribute to greater financial inclusion.

Period Ongoing (2012-2013)
Partners FinMark Trust and Cenfri
Total project cost and UNCDF contribution 1,396,472
500,000
Project

Microlead Expansion

Goal To contribute to the development of strong inclusive financial sectors and the achievement of the MDGs.
How

MicroLead leverages:

•The catalytic role ‘market leaders’ can dramatically expand scale of retail services based on proven business models and also shape norms and standards of practice in underserved markets that can help to drive overall market development.

• The role of market leaders to crowd in and attract investors to capitalize or refinance lending portfolios, allowing public institutions to limit their investments to smart subsidies.

• The need to meet the demand from low-income people for opportunities to save through safe, convenient and flexible products that are provided alongside opportunities to borrow, which market leaders are more capable of delivering safely.

Period Ongoing (2012-2016)
Partners LIFT Myanmar
Total project cost and UNCDF contribution 7,306,262
 

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