Business Case and Intervention Summary
Intervention Summary
Title: Microfinance Services for the Rural Poor in Burma
What support will the UK provide?
DFID will provide £7,480,000 to increase access by around 67,700 poor people to microfinance
services. This programme will provide loan funds to four registered international microfinance
providers. It will improve access to small loans, expand geographic coverage and increase the range of
products available to clients. The programme is directed at rural, households that are predominantly
poor and who have only small land holdings or they may be landless. The majority of loans will be for
women so the programme will indirectly benefit an additional 335,000 people in their families. The
project will drive the expansion of microfinance provision into new townships of Burma not previously
covered. These will include remote communities in upland areas of Chin and Kayin states as well as
more densely populated townships in the Delta and Dry Zone. The project will have a duration of 15
months.
Why is UK support required?
At the turn of the 20th century Burma was the richest country in south-east Asia and a “major force in
the global rice trade“. Now it is one of the poorest nations in Asia ranking 149 amongst 187 nations on
the Human Development Index1 and has a lower rate of growth than any of its neighbours. With a large
land area; 8% of the total area is still available for agricultural expansion2 and being well endowed with
mineral resources and gas deposits there are promising options for future development. However,
Burma has a history of economic decay, currency controls, state ownership and central planning often
under military caretaker governments, which over the years eroded the foundations of the market
economy. Such institutions that prospered have been linked to the ruling establishment and largely
isolated from the reality of market forces.
An efficient and large scale financial system is essential to economic growth and poverty reduction.
Access to finance is extremely limited in Burma and until recently there was little concerted effort to
address the constraints. As such the financial sector remains small and underdeveloped particularly in
comparison with neighbouring countries. There are few institutions providing formal financial services
in Burma, particularly into the areas where it is most needed –rural locations and in the agricultural
sector. This sector provides 28% of GDP and is the largest employer in the country yet it receives only
2.5% of all loans3.
In response to the paucity of small holder credit, microfinance was first introduced to Burma in 1997 by
UNDP/HDI with donor funding, negotiated through a special Memorandum of Understanding with the
authorities. These programmes have performed well, results are encouraging and repayment rates are
around 98%. Targeted households are small often marginal farmers engaged in crop production and
1
UNDP Human Development Index 2011
Special report FAO/WFP Crop and food Security Assessment Mission to Myanmar: FAO January
2009.
3 Central Bank of Myanmar –data at end March 2011
2
landless households engaged in fishing and raising livestock. Almost all credit is provided through
group lending and women are the main beneficiaries of the loans. Despite these efforts coverage is
limited and millions of small and micro-entrepreneurs continue to rely on informal money lenders.
Recent policy changes in November 2011 allowed the licensing of Microfinance Institutions (MFIs) in
Burma for the first time. Allowing the provision of uncollateralised credit, including accepting deposits
and savings in the microfinance sector will facilitate greater access to finance. This has opened the
way for several NGOs who formerly operated through UNDP to obtain licences and to consider
expansion. Conservative estimates indicate a significant unmet demand for microfinance of around
US$ 400- 600m /year yet the flow of new funds particularly for higher risk crop and livestock loans to
smallholders’ remain inadequate and the sector poorly served.
DFID has been strong supporter of microfinance both in Burma and worldwide The value of
microfinance services to the poor has been recognised by the Foreign Secretary whom, during his visit
in January 2012, committed £10m for microfinance in Burma to assist 55,000 more people in rural
areas to access loans. This programme will meet this commitment by directly supporting the expansion
of credit to >67, 000 households.
What are the expected results?
The project’s intended impact is to reduce extreme poverty, hunger and vulnerability in Burma,
especially for the poorest and hard-to-reach groups.
The programme will deliver the following results;
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Provide formal credit to >67,000 mostly women clients indirectly benefitting 335, 000 people in
their households:
Make £ 5.70 million in loan capital available to on-lend to clients;
Increase access to financial services to 15 new townships and expand existing branches in 24
townships in some of the poorest rural and peri-urban areas of Burma for women in poor
farming and non-farming households;
Expand micro-finance services to 4 new townships in Kayin and 1 in Chin; areas that are more
remote, ethnically diverse and sparsely inhabited where no microfinance provision exists;
Provide additional loan capital to increase client numbers in existing branches in the Delta, the
Dry Zone and in Shan state;
Make a variety of loan products available depending on client need and capacity varying in
amount between £40-£800;
Regularise and formalise village-level savings groups;
Increase the number of micro and small enterprises providing an income source;
Introduce pilots providing financial safety nets and client welfare programmes that will increase
resilience to shocks;
Deepen our understanding of the microfinance sector and prospects for expansion.
Business Case
Strategic Case
A. Context and need for a DFID intervention
Country Context
Poverty affects around 25% of the population of Burma and is twice as high in rural than in urban
areas.4 The highest levels of poverty are to be found in Chin state (73%) followed by Rakhine (44%)
Shan (33%) and even in the Ayeyarwady delta, the rich agricultural heartland of Burma, it reaches
19%. While food poverty affects fewer people, (around 5% of the population) and has fallen since
2005, it remains unacceptable high, affecting around 25% of the population in Chin state, and 10% in
Rakhine. Food poverty also remains stubbornly high amongst rural populations in Ayeyarwady
Division. Small farm size is an indicator of poverty while landlessness is a significant phenomenon at
around 24% of those whose primary economic activity is agriculture. There are indications that
landlessness may have increased over time particularly amongst the very poorest (IHLCS).
Political Context
This year has seen dramatic political developments in Burma which offer prospects for peace and
reconciliation between the government and armed groups representing ethnic minorities in the border
areas. Although the causes of these conflicts are complex often there is a sense of being excluded
from mainstream economic development and that the rich natural resources of these areas are being
plundered by outsiders with little or no benefit to the indigenous people. Some of the implementing
partners under this programme have experience of operating in the border states and we have an
opportunity for them to offer their services more widely to some of the marginalised communities.
Kayin state where Save the Children will start operations is where armed conflict has been going on
for around 6 decades. With signs of stable and peaceful condition in the south and east of the state
the authorities are inviting international and local organisations to assist in recovery. Kayin State
serves as a transit as well as the origin for both external and internal migration. Lack of access to
capital has played an important role in the out-migration of people while for those remaining
remittances are often the only source of income. The provision of small loans will particularly benefit
those who have stayed behind. While it may be too early to consider offering credit facilities to
families returning under any peace initiatives, the increased presence of a formal MFI in these border
states presents a potential opportunity.
Access to Finance in Burma
Burma’s financial system matters as financial systems play a critical role in a country’s development.
Until recently financial institutions were not allowed to provide credit without collateral, backed either
by property or by a fixed deposit account. As agricultural land remains the property of the state it
could not accordingly be formally pledged as collateral5. As a consequence small tenant farmers and
the landless could only obtain credit without collateral from land owners or landlords at high interest
rates or in return for the supply of labour or a proportion of their crop sales. The institutions involved
in microfinance are believed to serve an estimated 3.6 million individuals. The Myanmar Agricultural
Development Bank is by far the largest provider of seasonal agricultural credit and is reputed to have
1.5 million clients. However, under-capitalisation, small loan sizes, the need for collateral and political
approval at township level for those requesting loans, means there is little incentive for Burmese
farmers to seek to do business with the bank. Instead, the system encourages cronyism and favours
those with influence. In the absence of formal financial services populations in both rural and urban
areas and particularly the poorest continue to utilise informal money lenders paying interest rates of
20% sometimes more each month.
The passing of the new finance law in November 2011 has resulted in the opening of the MF sector
and led to flurry of interest from international MFIs looking to do business in Burma. However, before
they can start operations they need to register both as a legal entity and obtain a licence to operate
4
5
Integrated Household Living Conditions Survey in Myanmar 2009-2010 UNDP
Fiery Dragons; banks, moneylenders and microfinance in Burma, Sean Turnell 2009
as a microfinance enterprise in Burma. In addition, before starting operations in a new township
clearance has to be obtained from the township authority. This can lead to delays if the population of
the township is known to favour opposition parties. Consequently obtaining these approvals takes
time. Four partners: Pact, Save the Children, World Vision Myanmar and Groupe de Recherché et
D’echanges Technologiques (GRET) with a long history of working in microfinance in Burma have
obtained registration and permissions to operate. All operated previously under the UNDP/HDI
mandate and have existing clients, branches, trained staff and a detailed knowledge of the sector
and prospects for growth.
A Microfinance Supervisory Committee has been formed at Union level to implement polices under
the law and to manage and provide oversight to the sector. It is also empowered to determine the
interest rate on deposits and to ensure that the interest rates and service fees on loans are in line
with market rates. In addition, at the technical level, the Myanmar Microfinance Supervisory
Enterprise (MSE) was established to scrutinise and approve licences and to supervise and inspect
microfinance institutions. However the lack of capacity in the MSE raises questions over its ability to
effectively implement the law and to ensure the microfinance sector evolves in a sustainable manner.
Given these concerns the multi –donor Livelihoods and Food Security Trust Fund (LIFT) programme
(with 40% DFID funding) is supporting jointly with the World Bank, a programme of strengthening and
capacity building support to enhance the institutional capacity of the MSE.
Previous DFID Support for Microfinance in Burma
Worldwide the UK has been a major supporter of microfinance (MF) services to the poor over many
years. In Burma DFID support for MF is more recent, becoming a component of programmes funded
through LIFT in the Delta in 2010/11 as part of the reconstruction effort after the devastation wrought
by cyclone Nargis. Ensuring access to microfinance has been one of the priorities of LIFT has
allocated $16.13 (around £11.0m) to microfinance through a range of partners and has programmes
operating mostly in the Delta and the Dry Zone but with smaller programmes in the more remote
states of Shan, Kachin and Chin. DFID’s contribution towards microfinance programmes through
LIFT is estimated at £4.3m. In 2011 DFID invested £1.8m for microfinance in a one year programme
through the United Nations Development Programme’s /Human Development Initiative (UNDP/HDI).
This was to allocate core funds to cover the final year as the risk of not funding was a precipitous
withdrawal from entire townships leaving communities with little option other than to resort to
borrowing from money lenders.
This programme meets DFID’s high level objectives as set out in the Operational Plan 2012-15 by
boosting wealth creation and increasing support for economic development in Burma. It also
addresses directly DFID Burma’s headline results increasing the number of women reached with
access to financial services as a result of DFID support.
.
B. Impact and Outcome that we expect to achieve
The impact of the programme will be: Reduction in extreme poverty, hunger and vulnerability in
Burma, especially for the poorest and hard to reach groups. The Outcome of the programme is: the
food security and income levels of the rural poor and vulnerable improved through expanded access
to rural credit and savings
The four implementing partners for this programme are seeking additional loan capital to expand their
operations into new townships, to increase credit to existing branches and to cover the costs of
managing and supervising these operations.
The expected Outputs are
 Increased access to formally-managed financial services for poor people and women
 Greater geographic coverage of microfinance programmes to improve access in new areas

Increased access to information for borrowers and savers with an improved range of financial
products.
As a result of the programme there will be:
 Increased incomes for both farm and non-farm households
 A greater range of livelihood options available;
 Asset accumulation;
 Reduced dependency on money lenders and short-term high interest loans
 Increased expenditure on education and health care
 Greater empowerment of women;
 Awareness education on the management of economic activities and the understanding of
market economies.
Appraisal Case
A. What are the feasible options that address the need set out in the Strategic case?
The demand for microfinance in Burma is estimated at between US$ 400-600m6 yet despite the
success of a handful of institutional microfinance actors the industry remains underdeveloped, its
growth until recently constrained by the lack of a clear regulatory framework and legal authority. This
led to limited donor attention to the development of microfinance yet despite this the donor funding
made available has been the driving force behind the rise of microfinance in Burma
Option 1: The preferred case DFID will provide direct support through four Not-for- profit international
Micro-finance Institutions. These international NGOs have been operating in Burma under the UNDP
restricted mandate and have extensive experience of the areas wherein they operate. All have
acquired a licence to operate under the new Microfinance law and comply with the required acts
governing their operations. Their proposals together total £7.45 million and some 75% of which will be
dispersed as loans to clients within 12 months. All will use these new DFID funds to expand their
operational areas widening the geographic scope into new townships and wards and increasing the
client base of their programmes. Each of the partners operates in different parts of the country using
methodologies adapted to local conditions and client needs. This approach through the four partners
spreads the financial risk for DFID while allowing comparison and lesson learning from the different
organisations.
Option 2: The UNDP’s HDI programme was the pioneer in establishing microfinance and has been
operating in Burma since 1997 under a special Memorandum of Understanding (MOU) with the
authorities7. The microfinance component works largely through Pact with close to 500,000 clients of
whom 97% are poor women. UNDP was instrumental in bringing microfinance to Burma and remains
the largest micro-financer in the country although programmes are implemented by Pact. The
experience and security provided by UNDP/HDI made it our initial first choice of partner for this
programme. However, various obstacles were encountered during exploratory discussions.
1. The main constraint was over who owns the US$ 65m comprising donor grants and accrued
interest passed through UNDP over the years? The existing MOU that UNDP has with the
Government dating back to 1997 does not allow these funds to pass to the MFIs implementing
the programmes. Also, as the UNDP is not a Financial Institution, it cannot issue grants and in
6
Estimate based on a $100 loan required by 40-60% of the 10m households .UNDP
restricted mandate was adopted by the UNDP Governing Council in 1993 in response to the
worsening economic situation of rural communities. It recognised critical basic needs and that future
assistance should be targeted towards projects having grass-roots impact in five defined sectors
areas>this mandate is re-affirmed each year..
7The
2
fact cannot show these funds as assets on its books. UNDP envisages these funds being held
ultimately by an apex microfinance organisation but as yet no such body exists. The idea that
all donor funds provided through UNDP, including those under this programme, might now be
transferred into some nebulous Apex agency, whose role, constitution and management have
yet to be determined, is unrealistic. There remains no clarity over the future role of the
Government’s relationship with this apex body as these donor funds were never intended to
be within their jurisdiction and control. The possible scenario of the Government directing to
whom and where these donor funds should be allocated is unacceptable. This remains a
wider issue that will have to be addressed by donors and UNDP given the $65 m of donor
funds that have accrued over the years.
The second constraint was that MFI partners were no longer willing to work with UNDP given
uncertainty over the ownership of the grant and their past experience of bureaucratic delays
over release of funds. Until last November no MFI could operate except under the special
mandate of UNDP or another UN organisation. With the passing of the Microfinance Bill they
now have licences to operate independently and thus see no additional benefit from operating
through UNDP.
Option 3: This would place all DFID funds in the hands of single Microfinance Institution. Pact is the
largest microfinance operator in Burma and would welcome the opportunity to expand its client base
in the areas where it operates. While this option would simplify the management and supervision of
the programme, it would increase the financial risk should there be widespread default on agricultural
loans as a result of drought in one of their key operational areas- the Dry Zone. This constraints
associated with this option are:
1) It would accentuate the dominance of Pact in delivering microfinance in Burma making it
virtually the sole repository of and conduit for DFID funds to the sector. Pact already
handles $16.1 m of LIFT funds to which DFID contributes 40% and Pact was the sole
partner under the previous UNDP/HDI programme which DFID co-funded. Further support
would place the entire DFID microfinance programme in the hands of a single operator.
2) While Pact has an extensive outreach programme in the densely populated Delta and the
Dry Zones it has to date not expanded into the uplands where populations are poor and
thinly spread. As such it has not developed programmes for these conditions neither has it
built a client base from which it can expand.
3) There are limits to the number of clients that existing Pact staff can identify. Training staff
and opening new branches cannot be hurried. Pact have indicated that they can only
handle 38,000 clients within the timescale of this programme and cannot gear up more
rapidly to absorb any additional funds other than those being made available under this
programme.
Option 4: The LIFT multi-donor trust fund has been the main conduit for DFID microfinance funds to
date. LIFT has invested £11.1 m through implementing partners of which DFID has contributed 40%
currently (£4.63m). Using LIFT as an option for funding would be possible and would be a well-tried
route for funding. There are however two major constraints:
 As a multi-donor trust fund partner DFID cannot direct its funds into a particular sector or
intervention or specify how its funds should be used. The use of LIFT funds is decided
through consensus by the Fund Board. DFID is a member of the Board but cannot drive the
agenda. When projects are approved, only around 40% can be attributed to DFID. Currently
LIFT is cash rich and to provide additional funds for microfinance would be financing ahead of
need;
 A new microfinance proposal could not be presented to the Fund Board by the Implementing
partners until the December meeting leaving insufficient time for contract negotiations and
payments during the current UK financial year
Option 5: The “Do Nothing” counterfactual argument would slow down the expansion of the more
vigorous MFI by reducing the flow of credit and perhaps more importantly the management and
support costs required to open new branches. There has been an upsurge of interest from overseas
“new entry” MFIs looking to provide microfinance services in Burma some of which are prepared to
provide their own capital. However all are seeking donor partners to assist management and
overheads to cover the softer start up components of their entry into Burma. In all case, where private
sector equity is concerned, institutions will be very conservative in their choice of operational areas
and in the products that they offer. Those we have met have indicated clearly that their preference is
to develop new markets in urban areas, only later expanding activities into peri-urban areas.
New entry MFIs are also cautious over the nature of the loans they are prepared to provide. They
initially favour short-cycle small to medium loans for business development where the repayment
period is short and where the client is able to make regular loan repayments from a steady income
stream derived from sales. Few MFIs other than NGOs are prepared to develop and promote
financial products for the high risk agricultural sector. The risks associated with dry land (rain fed)
cropping are high, yet this is the dominant agricultural system for millions of smallholders throughout
the Dry Zone that covers much of Magway, Mandalay and lower Sagaing Divisions. Besides the
probability of regular droughts impacting on and depleting crop yields, the loan cycle is determined by
the length of the cropping season and is rarely less than 6 months.
The more marginal upland areas of Burma pose even greater risks for potential MFIs with low
intensity low value agriculture systems where livestock holdings are seen as the main exit point from
poverty. Livestock in the absence of an effective veterinary services and limited access to advice on
animal husbandry, poses a greater risk than even droughts and pest attack on crops. In addition, the
scattered nature of the populations in the uplands increases the management and supervisory costs
of any MFI willing to operate in these areas. The “do nothing” option would seriously hinder any
expansion of credit facilities away from the densely populated urban and intensely irrigated centres to
the agriculturally more marginal areas of Burma.
Table 1: Theory of Change
The Key Problem is:
An efficient and large scale financial system is essential to economic growth and poverty reduction.
Access to finance is extremely limited in Burma and until recently there was little concerted effort to
address the constraints. As such the financial sector remains small and underdeveloped
particularly in comparison with neighbouring countries. There are few institutions providing formal
and diversified financial services in Burma, particularly into the areas where it is most needed –in
rural locations and in the agricultural sector. This sector provides 28% of GDP and is the largest
employer in the country yet it receives only 2.5% of all loans.
Inputs
Outputs
Outcomes
Impact
The problem will be addressed through the provision of £5.85m of loan capital to on-lend to
67,700 mainly women clients over a one year period. The group lending methodology will be used
for clients to select from the range of products on offer.
Funding
DFID
£7,480,000
DFID livelihood technical
advice
DFID Technical support
on M&E
Output 1
Increased access to
formally-managed
financial services for
poor people especially
women with regular and
timely loans available on
demand for a variety of
purposes
Direct outcome:
Direct impact:
Increased income for
poor households.
The food security
improved for remote and
hard to reach areas.
Increase in area under
crops and higher yields
New opportunities for
business in border and
Number of poor people
under the National
Poverty Line reduces.
Process
Accountable grants to:
PACT:
£4.84m
GRET
£0.670m
Save the Children
£0.90m
World Vision Myanmar
£1.045m
In addition:
DFID reviews
£25,000
Output 2
Greater geographic
coverage of
microfinance services,
especially for remote
and hard to reach
communities.
Output 3
Improved range of
financial products and
information
marginal areas of Burma
Increased consumption
by the poorest people.
Opportunities for savings
increased
Indirect outcome:
Indirect impact:
Reduced reliance on
informal money lenders
Inclusion of ethnic areas
into mainstream
development;
Women take control over
investment decisions in
households.
Improved health and
education for poor
people.
Clients understand and
utilise better banking and
insurance services
Reduced vulnerability of
households in upland
rain-fed farming areas
Rural households have a
greater resilience to
climate and financial
shocks
Wider economic
empowerment for the
poor
Key assumptions are:
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No political interference or patronage in the identification of townships or clients and in
forming loan groups.
Local administration is willing to support the project activities.
High inflation rate does not reduce the number of clients and affect the size of the future
loan portfolio;
There are no major natural disasters or man-made turbulences in programme areas that
affect clients ability to repay loans;
Income increases accompanied with women’s’ empowerment and increased social capital
(via loan groups) will lead to better spending, enhanced saving behaviours and improved
consumption.
Key project activities to turn inputs into outputs are:
 Identification, obtain permission to operate and conduct feasibility studies of new locations
for branch offices;
 Obtaining official approval to extend into new townships;
 Recruitment and training of new staff;
 Selection and verification of new clients;
 Establish savings and credit solidarity groups
 Training of clients in financial literacy and managing income;
 Disbursement of loans;
 Loan utilisation monitoring and loan recovery
B. Assessing the strength of the evidence base for each feasible option
In Table 2 below the quality of evidence for each option is rated as either Strong, Medium or Limited
Table 2: Strength of evidence base for each option
Option
1-4
Evidence rating
Strong
There is strong evidence of the impact of microfinance on the poor under Options 1-3. They all
propose using a group approach with an emphasis on women. All agencies have extensive prior
experience of implementing similar microfinance programmes in Burma. As such all know the areas
where they intend to operate, have existing programmes either in those areas or adjacent to them
and have developed suitable micro-finance packages that meet client’s needs. The programmes of
Pact and GRET under the UNDP/HDI programme have been subjected to an impact study8This found
that the impact on the client’s household, on their community and on poverty alleviation more
generally was visible in many areas: business expansion, food security, better health care and a
higher social status. Clients of microfinance programmes increased their assets by 22% compared
with non-clients while at the same time, were able to increase expenditure by 17%. The business
growth and expansion brought about a shift from primary agriculture to secondary business such as
trading and services which were more dynamic.
Evidence from a wider study of microfinance9points out that not every borrower is a potential
entrepreneur and that not all poor people engage in activities providing high yield returns. Instead
there are many important benefits to households by using loans to accelerate consumption, absorb
shocks or make household investments such as home improvements or education for their children.
Poor peoples’ financial needs often go beyond acquiring working capital for micro-entrepreneurs.
They use the credit obtained in a variety of formal and informal ways to cope with and manage the
risks that comes from having uneven cash flows.
The UNDP Impact study shows that access to micro-finance does not remove the need to borrow
from informal sources- instead it becomes another option available. Money lenders and input
providers may charge up to 20% per month, although this rate is reduced to 5% per month for regular
borrowers with collateral and 10% for those without. Interestingly clients who are known to be reliable
members of a village loan organisation often receive more favourable interest rates from informal
money lenders. Informal credit remains important and often complements formal provision as it meets
the additional credit needs of the poor often with easier access and greater flexibility. Providers of
farm inputs remain a vital source of credit as they are willing to provide larger amounts allowing the
cultivation of a greater area and they also provide marketing outlets for small producers. The need to
continue utilising informal sources of credit highlights the existing gap between credit need and
supply and the requirement for a wider and more flexible range of MF products in the market.
The Preferred Option 1
This option maximises delivery of the Theory of Change and represents a major investment by DFID
into microfinance. It offers the opportunity to include both the populous areas with good agricultural
potential where there is a high demand for credit as well as the more marginal areas where there is
no prior history of group lending. To do this the programme will support 4 microfinance NGOs that
have a wealth of experience of working under constrained circumstance in Burma. The regions and
states where they intend to operate and the client numbers they will serve are set out in Annex 2.
8
Sustainable Microfinance to improve the Livelihoods of the poor: UNDP/UNOPS MYA/01/004 2007
Latest Findings from Randomised Evaluations of Microfinance; Bauchet, Marshall, Starita, Thomas
and Yalouris CGAP 2011
9
and details of their programmes in Burma and the products that they offer are in Annex 3
The four implementing partners will be:
Pact
Under the programme DFID will provide £4.84m to Pact to expand its existing programmes to a
further 38,000 new clients (95% of whom will be women) from rural households in 13 townships (5
existing and 8 new). These townships are in Yangon, Ayeyarwady and Magway Regions where there
is mix of agriculture and agro-business opportunities. Plans to expand operations into three additional
Yangon townships are subject to obtaining permission and a licence to operate. As there are political
sensitivities around allowing donor support to these townships obtaining a licence to operate may not
be as straight forward as it is elsewhere but applications have already been submitted.
In addition, Pact will introduce two social protection interventions - .a Beneficiary Welfare Fund where
a small proportion of interest payments and project incomes are set aside each month to establish a
Welfare Fund. It will promote savings and educate borrowers on the value of savings and ensure that
all borrowers have a savings account to draw on. Interest will be paid on savings made.
Save the Children
DFID will provide £900,000 to Save the Children in Burma to bring sustainable livelihoods to 14 450
poor women through the provision of financial services indirectly benefitting 72,000 people in their
families. Save will target women from rural households in 7 townships covering a mix of peri-urban in
the south of the country and will expand into 4 rural townships in Kayin State. All the women will be
from low-income families and women-headed families primarily in urban and peri-urban areas using
the group guarantee lending and savings model. Save will offer both credit and savings services:
GRET
Under the programme DFID will provide GRET with £670,000 to provide savings and credit services
to 5,100 people or clients in Chin State, the poorest state in Burma. DFID will provide GRET with
credit facilities and operational expenses sufficient to recruit an additional 5,190 clients from rural
households in four existing and one new township (almost doubling its client base). Project funds will
be used to increase operations and recruit new clients in 99 existing villages and expand to 17 new
villages in townships where GRET operates livelihoods interventions. DFID funds will be used to
expand microfinance operations into a new township; either Matupi or Tonzang depending on the
results of feasibility studies. Matupi township was badly affected by crop failures last year and
required emergency food assistance provided by the World Food Programme.
World Vision Myanmar
World Vision will receive £1.045m to provide additional loan capital to 10,000 clients in 14 townships
including expansion into 2 new townships. The programme has a wide geographic spread including
the Delta region, the Dry Zone around Mandalay and one township each in Shan and Kayin states.
Some 5,000 will be new clients while the same number will be existing clients who receive another
cycle of loans to meet their growing capital needs. Currently 57% of loans are for small business
development and a further 27% for agriculture with services and production taking the remaining
16%. The average loan size is <£100. Solidarity group lending will remain the core methodology on
offer but individual lending to small businesses is planned for 2013 while a pilot education loan plan to
finance tuition fees for children will continue in South Dagon.
Evidence of Impact on Women
Evaluations of microfinance (CGAP 2011 op cit) have shown a marked focus on lending to women
partly as a consequence of commercial interest given women’s higher loan repayment rates. Women
tend to put more of their earnings back into the home or into services than men, so serving women is
good for business and good for fulfilling a social mission. Since formal sector jobs for women in poor
communities are scarce, business loans are seen as addressing a critical need. Giving women credit,
cash or business inputs relieves their capital constraints and helps them access business
opportunities. The UNDP/HDI impact study found that in household decision making the increase in
women’s influence and involvement was 62% compared with 35% for non-clients. The same increase
in women’s influence in village activities was noted as well as a considerable rise of women’s status
(72% vs. 25%) and confidence within their communities (82% vs. 36%).
World Vision note that farmers with larger plots tend to be men so in very rural areas male client
numbers are higher than other townships with smaller plots of land and where other types of income
generation are available. GRET is the exception as the social dynamics in Chin State are different
and the male head of the family is responsible for contracting and reimbursing debt. In the case of his
death his sons take on that role. As such the husband takes official responsibility for the loan contract
although both husband and wife will be involved in the investment. This traditional approach is
followed by new Village Credit Schemes when they first start but within 2-3 loan cycles GRET report
that the women begin to take charge of loans as they have often been the prime driver behind the
investment. While a decade ago women only comprised 40% of clients this number has now
increased to 60% and continues to grow. However loans to new clients will probably follow the
traditional pattern with men largely taking responsibility for new loans.
Table 3: Number of clients and the percentage of women in the new programme
Implementing partner
Save the Children
Pact
GRET
World Vision
Total
Number of clients
14,450
38,100
5,190
10,000
67,740
% women
100%
95%
40%
75%
Given the above percentages the number of women expected to benefit from this programme will
exceed 60,000. A detailed breakdown of client numbers by division/state is given in Annex 2.
What is the likely impact (positive and negative) on climate change and the environment for
each feasible option?
The programme area are exposed to extreme weather events, which can pose a risk to project
objectives by disruption and distress migration, which reduces the capability of the poor to be
involved in proposed activities/services – as clients, producers or employees, thus affecting the
viability of the institutions providing these services. Environmental issues relating to the programme
will be especially significant for clients seeking loans for agricultural activities. Up to 70% of the
population relies on the country’s natural resource base for their livelihoods and this programme is
directed at populations in rural areas. Natural resource management is therefore of paramount
importance to sustainable development and improved local livelihoods. However, certain
interventions such as making available appropriate insurance products and distress loans will help
reduce the vulnerability of the poor and reduce the extent of distress migration or viability of
institutions created by the project.
All the above options include one or more of the same implementing partners and the impact of all
options would be similar. The seasonal agricultural loans are used largely to access agricultural
inputs. Used properly these have the potential to improve soil husbandry, intensify arable agriculture
and yields thereby taking pressure off more marginal lands where returns to inputs are lower. The risk
is that if these inputs are used in an inappropriate manner, the results could be increased water
pollution and poor soil and water management. Loans however are small, rarely providing inputs
sufficient for more than an acre or two of land. Many of the loans provided by the implementing
partner will be linked to farmer groups already working through donor-sponsored programmes that
provide technical advice and assistance on improved farming techniques and the use of organic
manures.
The proposed intervention will spawn off a large number of micro-enterprises, many of which, e.g.,
small scale manufacturing, livestock, irrigated agriculture, agro processing may consume biomass or
fossil fuel based energy, leading to GHG emissions. The volume of GHG emissions however, is likely
to be very low. The other major agricultural and small business loan type is for livestock purchases,
predominantly pigs for breeding or fattening but sometime cattle and buffalo to provide draught
power. Given the value of these animals they are kept in stalls and fed by hand so that they do not
roam freely destroying vegetation. Their manure forms an essential component of the home garden
organic composting programmes operating in many villages reducing the need for purchased artificial
fertilisers. It is accepted that raising goats can be very lucrative and there will be a continuing demand
for credit to purchase animals. The providers of MF do not control the activities or the actions of the
borrowers; it is for the village groups to decide based on the ability of the borrower to repay. There
will be peer pressures on any goat owner to conform to local modes and bylaws concerning grazing
within the village and its agricultural hinterland. However, the MFIs will attempt to ensure that
requests for loans to purchase goats are linked to wider support/production programmes that are well
supervised and monitored and will make sure that opportunities within the value chains are tapped to
ensure environmental sustainability of various other interventions as well. Where possible credit
programmes will be linked to wider development programmes run directly by their organisations (in
the case of GRET and Save the Children) or with other partners in the case of Pact.
Natural calamities have increased in incidence in recent years possibly as a result of climate change.
Their impact has been most pronounced on rural population with communities in Rakhine and the
Ayeyarwady delta both having been seriously affected by cyclones in the last four years. These
cyclones have left communities with damaged crops and severely crippled the agricultural economy
for several seasons. Since Cyclone Nargis, however, the government committed to formulate and
implement a national disaster preparedness plan and a more effective early warning operation is in
place.
The intervention design aims increased access of poor to financial services and markets. These two,
have been cited in various studies as important factors in enhancing financial and economic capital,
key to building resilience of communities to climate change. The micro finance mode of financing will
create solidarity and therefore the required social capital to cope with climate shocks. For example,
micro-financing, coupled with carbon finance can be structured to enable farmers to use water
efficient irrigation, other soil and moisture conservation techniques in areas likely to suffer increased
droughts due to climate change. Similarly, in flood prone areas, micro financing may be used for
building household assets to avoid asset and life loss due to increased flooding.
In the table 4, the likely risk-impact on climate change and environment are presented. These
categorises as A, high potential risks / opportunity; B, medium / manageable potential risk /
opportunity; C, low / no risk / opportunity; or D, core contribution to a multilateral organisation.
Table 4: Climate change risks and opportunities
Option
1
2
3
4
5
Climate change and environment risks Climate
change
and
environment
and impacts, Category (A, B, C, D)
opportunities, Category (A, B, C, D)
C
B
C
B
C
B
B
C
C
C
C. What are the costs and benefits of each feasible option?
Costs: Option 1
The allocation between Operating expenses and the Financial provision (Loan Capital) is almost the
same across all partners regardless of number of clients or the operating environment. There appears
to be a ratio of 3:1 between Financial Services and other costs. Where the implementing partners do
vary is in the total cost/client and total operating cost/client10 .Total cost and operating costs of Save
the Children are approximately half those of GRET and Pact. This is due to the large numbers of
small loans that Save issues (average £47)where the larger client numbers offsets the slight increase
in management numbers and the cost required to operate.
Table 5: Cost comparison between the Implementing partners
Pact
Save the Children
World Vision
GRET
Total £
%
Total £
%
Total £
%
Total £
%
Human Resources
493,312
10%
103,057
12%
86,000
13%
47,561
5%
Operation Expenses
452,534
10%
75,682
8%
41,000
6%
94,170
9%
3,644,188
75%
675,000
75%
509,000
76%
851,000
81%
248,428
5%
46,262
5%
34,000
5%
52,476
5%
4,838,662
100%
900,000
100%
670,000
100%
1.045,207
100%
Financial Services
(Loan)
Management Cost
As with the cost comparison among the MF partners, the differences are not significant except the
Operation costs between Pact and GRET. This is mainly because Pact will be establishing 9 branch
offices 2 in existing and 7 in new townships; while GRET will expand those it already has in four
townships and will only open one new township office. All four IPs have charged 5% for indirect
management costs. World Vision has the lowest Human Resource costs due largely to only having to
recruit and train new staff for around half of its branches. Some 50% of World Vision’s clients are new
the others are trusted clients in existing branches who are receiving additional business capital and
continue to be serviced by existing staff.
Costs: Options 2 -4
These options were discounted on grounds other than costs. However, by not using Option 2 through
the HDI programme releases £315,000 that would be set aside as UNDP operational costs (7%) on
top of Implementing partner charges. Instead this sum is being made available as additional loan
funds under the other options. Option 4 through LIFT would have incurred similar indirect operational
costs as LIFT is managed through UNOPS. The argument for not using Option 3 was the restricted
geographic spread of the programme that would have excluded Chin and Kayin where the needs are
great. However additional funds would not have reduced the Operational expenses of Pact to below
its current level of 10%.
Table 6: Expected benefits of the intervention
Who benefits and How
Direct
Poor rural households;
Small businesses operated by
10
Quantification
Monetary value
Small loans from $25 upwards
on demand that meet a range
£5.84m available as capital for
on-lending as loans
Total cost/client = total budget divided by number of clients receiving loans;
Total operating cost/client is the operating cost only divided by client loans.
women;
Landless families;
Smallholder farmers <3 acres
of land;
Indirect
Increases rural economic
activity;
Children attend schools
Greater social cohesiveness
of business and domestic
needs for 67,700 clients ;
Savings products available
encouraging financial
awareness
Reduced dependency on
informal money lenders and
access to cheaper credit
Balance of Costs and Benefits
To calculate the return to this microfinance project, we have used a cost benefit analysis undertaken
by LIFT for their microfinance programme11.While there are differences between the LIFT project and
this; the cost benefit analysis of the LIFT microfinance component which uses some of the same
partners with similar credit packages is a good basis for judging the value of investing in microfinance
in Burma.
The LIFT cost/benefit used two approaches it calculated:
(i)
Savings made by clients of the microfinance project who would have otherwise taken out
costly loans from moneylenders – the interest rate differential between the microfinance
programme and the rate offered by moneylenders drives these savings.
(ii)
Returns to those clients of the microfinance project who would not otherwise obtain a loan
from another source.
This builds a basis for estimating the value of investing in microfinance in Burma. However there are
still caveats in that reliable data is hard to collect and we need to continue to test and monitor the
assumptions we have made to build the case. The DFID team will continue working closely with LIFT
and other partners in Burma to incrementally improve the evidence base.
The LIFT cost benefit analysis showed that from a total cost of almost $16 million over four years, it
generates total discounted benefits of $23.8 million or a benefit cost ratio of almost 1.5. These
benefits mostly come from the savings to clients who would otherwise have taken costly loans from
moneylenders ($20.5 million of the total discounted benefits). Bearing in mind the differences
between the two programmes we can still project a ratio of 1.5 for this programme so with the credit
available of £5.85m the benefits would approximate to £6.75m. This constitutes a 50% return on
investment and would clearly indicate that investing in microfinance generates good value for money.
Sensitivity
These results have been tested for changes in a number of the key assumptions and the returns
remain robust against most variables. The most significant impact is the assumed interest rate
charged by moneylenders. This clearly signposts the importance of closely monitoring the informal
lending market to understand better the impact of microfinance. However, even though this affects
the return, we still see a positive BCR even if the assumed interest from moneylenders is reduced by
a third.
D. What measures can be used to assess Value for Money for the intervention?
Economy
- To ensure reasonable management costs
11
Livelihoods and Food Security Trust Fund Business Case, December 2011
- The project has negotiated with partners to reduce manpower costs by ensuring that staff costs are
shared on a percentage basis with programmes funded by others so that this programme does not
bear the full cost. The programme will monitor closely quarterly statements of accounts to ensure that
unit costs agreed are adhered to.
Procurement of consultants
No external consultants are involved. There are however backstopping and supervisory visits from
HQ which are detailed under management costs.
Efficiency
The programme is for one year during which time partners will establish new branches and bring
them to operational self-sufficiency. A year is sufficient to disburse funds for the first loan cycle but
longer-term sustainability cannot be assessed in such a short time.
Capacity building on banking services, business ventures,
New staff will have to be trained to meet the needs of expanded outreach and the operational costs of
the programme include staff training components. All reports will give information on numbers trained
and on progress with staffing new branches
Diversification of loan products, loan size
While GRET. World Vision and Save will introduce their full (but limited) range of microfinance
products Pact will initially introduce only those that are well-tested in similar environments Pact will
not embark on the provision of individual loans until several cycles of group lending have taken place
and Pact has confidence and a full understanding of the implications of group lending and in the
reliability of the system.
Effectiveness
Regular monitoring and a quarterly meeting with all partners to allow read across and the opportunity
to exchange views.
Equity
The programme targets mostly women. Solidarity Groups are self-forming allowing consultation
between the small group of potential clients and agreement on which products they wish to utilise, no
collateral is required. There are products that target the poorest with small loans that meet
emergency needs. All partners have or are planning to introduce some form of welfare schemes
where for around 1% of the fund disbursed the partners will contribute a similar amount which
provides up to Kyat 100 000 following bereavement of a group member and the settlement of the
outstanding loan amount. Smaller amounts are made available in case of loss of property due to
disasters.
E. Summary Value for Money Statement for the preferred option
All four partners will attempt to achieve breakeven point for all new townships within 5-8 months of
start-up and estimate operational self-sufficiency12 will be reached within 12-16 months. In the initial
stages new branches will receive operational expenses as subsidies from their HQ to support staff
and operations. On start-up, each branch will have a specific plan to reach operational selfsufficiency. Once this is reached they will continue services and work to expand their client base
using income surpluses from the credit operation. Besides reaching operational self-sufficiency the
MIS reports will be used to measure progress towards sustainability throughout and beyond the life of
the project.
GRET with the smallest programme operating exclusively in Chin State had already reached both
operational and financial self-sufficiency. The new MF regulations specify an interest rate of only
2.5%/month which will result in a decrease in income to the Village Credit Schemes and will apply a
12
Breakeven point is when an MFI can recover operational expenses from its income and monthly
break-even is expected to be 5-8 months after start up.
brake to regular increases in loan amounts and area expansion. The DFID funds will increase the
portfolio allowing the resumption of expansion and enabling the MFI to maintain self-sufficiency.
Commercial Case
Direct procurement
A. Clearly state the procurement/commercial requirements for intervention
Direct procurement is not envisaged as part of this intervention
B. How does the intervention design use competition to drive commercial advantage
for DFID?
Not applicable
C. How do we expect the market place will respond to this opportunity?
Not applicable
D. What are the key cost elements that affect overall price? How is value added and
how will we measure and improve this?
Not applicable
E. What is the intended Procurement Process to support contract award?
Not applicable
F. How will contract & supplier performance be managed through the life of the
intervention? Not applicable
Indirect procurement
A. Why is the proposed funding mechanism/form of arrangement the right one for this
intervention, with this development partner?
Funds will be disbursed to four Implementing partners through Accountable Grants based on their
proposals submitted and disbursement schedules. This is the standard procedure for grants on this
scale with international NGOs and not-for-profit organisations. All four partners have been chosen on
the basis of their prior experience in Burma and their knowledge of the areas where they intend to
operate. At present the number of licensed MFIs in Burma is limited, although numbers are growing.
Few however are prepared to initiate operations in the rural heartlands or in the more marginal areas
of the country. All those chosen here have a proven record of reliability, a solid client base and are
proposing to push forward with expansion plans.
While Pact only intends to operate in the intensively cultivated Ayeyarwady delta, and Yangon region
it offers a much needed agricultural loan. However, this is accompanied by a high degree of risk
where few other organisations not conversant with the vagaries of monsoon and summer cropping
and without a suitably adapted lending model would contemplate operating. World Vision with only
27% of its loans going to agriculture and the bulk with commerce is much less exposed to the
vagaries of the weather than Pact. GRET is one of the very few MFIs prepared to operate in Chin
State where populations are rural, scattered and where poverty rates are the highest in Burma. Save
the Children is proposing to expand from its current operational area around Yangon and the south
into Kayin State the scene of years of fighting between ethnic groups and the central government
over the years. While initially operations will be directed at established populations there are
opportunities, if peace building is successful, to perhaps offer support to communities returning to
their homes or those being resettled after years in camps in Thailand.
B. Value for money through procurement
Each agency will procure the essential office equipment that it requires to establish new offices.
These are mostly laptops and generators which will be purchased using the established procurement
processes that each agency has in place. Two agencies will hire vehicles while GRET and Pact who
are each requesting to purchase a vehicle. We believe an exception can be made for GRET as the
Chin operational area is marked by remote, rugged terrain with communities spread some distance
apart. Rental costs for a vehicle operating in this terrain could be prohibitive. Pact operations in
Yangon can also justify a vehicle as Pact has a massive expansion programme and requires an
additional vehicle to join its existing fleet rather than hiring. Both GRET and Pact have agreed to
reduce the purchase price of vehicles to £16,000. When the project finishes the new township
branches will continue to operate and to service an increasing number of clients. There is a case for
allowing both agencies to retain their vehicles post project so as to continue operations. For its
operations in Ayeyarwady Pact requires motor boats rather than vehicles supplemented by 2 motor
bikes per 3,200/client in each new township. If the three Yangon townships are substituted for the
Delta then funding for boats will be transferred to vehicle hire.
Financial Case
A. What are the costs, how are they profiled and how will you ensure accurate
forecasting?
The total cost of the programme will be £7,480,000 with a duration of 15 months from September 1st
2012 –end September 2013 to give time for agency reporting and the final review. DFID will provide
funding through Accountable Grants to each of the four partners paying quarterly tranches in
advance based on their budgets and forward work programmes. As each partner will require
significant levels of funds as loan capital it is possible to forecast their probable funding requirements.
Table7: Estimated quarterly expenditure requirement by Implementing partner (£)
Partner
Save
Pact
GRET
WVM
Total
September 2012
232,000
604 365
335,000
449,530
1,620,895
December 2013
480,000
1,247,676
335,000
424,230
2,486,906
March 2013
145,000
1,814,766
0
153,349
2,113,115
May 2013
43,000
1,171,655
0
18,098
1,232,753
Total (£)
900,000
4,838,462
670,000
1,045.207
7,453,669
Table8: Indicative spend by Financial Year
FY. 2012/2013
£6,220,916
FY 2013/14
£1,232,753
The unallocated £26,330 remaining from the £7.48m budget is for DFID to finance an independent
project completion review or an evaluation as required in 2013.
B. How will it be funded: capital/programme/admin?
The project will be funded from the DFID Burma programme budget (ARIES Project code:
203600).The Funding type is Not for profit Organisations (111). The input sector code is 24040
Informal/semiformal financial intermediaries. Funds are available within the DFID Burma financial
framework for the financial years 2012/13 and 2013/14.
C. How will funds be paid out?
Funds will be paid out according to payment mode as agreed in Accountable Grant and payment
schedules upon the submission of projected budget and actual expenditure statements. .
D. What is the assessment of financial risk and fraud?
Financial Risk
Each partner has an established system to reduce financial risk. This is largely based on extensive
cross checking and visits ensuring visibility and awareness. At Save, branch managers have to visit
two collection points daily to observe group meetings and to check the records of loan promoters and
client passbooks. The Branch manager is also mandated to conduct follow-up visits to at least 50%
of new clients monthly. In addition Regional Managers must make at least 8 visits each month to
branch offices while Operations Managers conduct at least 4 supervisory visits to each branch office
under their control. These visits ensure that branch office expenses are approved (or not) and
accounts, cash books and the loan disbursement master roll are all verified.
Fraud and Corruption
The risk of fraud and vulnerability to corruption varies little between the options. All microfinance
programmes could be subject to power influences in terms of diverting benefits towards selected
target groups or using the prospect of access to finance as a political bargaining tool. These external
threats are addressed in the Risk Analysis (Annex 1). Burma remains a cash economy with a poorly
developed banking infrastructure. As such large amounts of cash rather than cheques are handled at
every level in the system. To mitigate against the threat of fraud most agencies insist that more than
one staff are involved which prevents individuals disbursing funds independently. Most fraud cases
concern small amounts; either staff establishing ghost clients or clients attempting to access
additional loans. This is dealt with through greater focus on client checks by more than one staff,
segregation of duties and with having cashiers based in all branches.
Each MFI has in place rigid financial controls developed over the years using international best
practice and systems to minimise the risk of financial embezzlement by staff. Should this occur each
agency has its own fraud procedures with clear guidelines and procedures (which we have seen).
Where embezzlement is detected attempts are made by all to recover the stolen funds. All agencies
encourage whistle-blowing and some have a third party hotline in place. Given the history and prior
performance record of the selected MF partners and their reliance on donor funding for their country
operations, any suggestion of impropriety would increase reputational risk. This would seriously
compromise prospects for future funding and undermine their ability to operate in Burma.
E. How will expenditure be monitored, reported, and accounted for?
Pact
Each month PACT will prepare financial reports (trial balance, income statements and balance
sheets) through their Management Information Systems (MIS). The monthly MIS reports will be used
to track changes in credit indicators and well as changes to creditor’s incomes. These MIS indicators
were developed following best practice indicators prescribed by CGAP13 Pact HQ staff will review
these reports and conduct regular site visits to measure sustainability in terms of financial growth and
cost recovery.
Pact intends to hire a Yangon-based full time finance director responsible for the daily financial
management and to supervise the financial activities of the MF branches. There will also be a microfinance general manager responsible for banking operations with particular responsibility for the
7new branches. A finance manager will be responsible will oversee all accounting and financial
management and ensure timely financial reporting. All newly funded township manager and
accountants will report to this person who will also provide the link with external audits of the
programme.
Besides the MIS and accounting systems PACT has a strong internal audit system in place which
carries out a continuous internal audit of all branches. The internal audit coordinator ensures that the
project is compliant with MF and accounting best practice along with all mandatory regulations from
government, donors and Pact’s own internal policies.
Save the Children
Save has an internal audit system through which audits are carried out on a regular basis by
participating regional staff and a Save the Children internal auditor. The audit teams monitor
according to standard MIS procedures
GRET
The credit committees at village level are responsible for the collection of repayments and
maintaining their accounts. These are overseen at the township branch office by credit supervisors
and an accountant who oversee financial control and provide monthly financial statements to HQ. At
HQ there are two internal auditors and an accountant providing oversight of operations and
submission of a consolidated MIS and financial statements. GRET has confirmed that it will provide a
financial report in December, at the end of its financial year as well as an end of project financial
report. Funds are included in their budget for an external audit
World Vision Myanmar
A HQ accounting team reviews monthly financial transactions occurring at each branch to ensure
compliance with World Vision’s international finance policy. In cases of non-compliance the General
manager is informed and an investigation carried out. Accountability is ensured through regular and
consistent monthly reporting of portfolio and social performance data as well as income and balance
statements. External financial and operations audits occur annually and every two years World Vision
Myanmar is audited by World Vision’s East Asia Audit Centre. The systems in World Vision are such
that they allow monitoring of external funding on a segregated basis to meet DFID’s auditing and
reporting requirements.
Each partner
-
will submit Quarterly payment requests together with quarterly expenditure and
cumulative expenditure to date against detailed project budget lines; .
- will, by the end of month 13, submit a Final financial report , an inventory list of all
items of equipment purchased (above £1000) under the grant and
- will submit a project-level audit report conducted by an external audit firm within 3
months after the project end date.
The DFID programme officer will review these reports, clarify with IPs to ensure that action is taken to
address weaknesses and record them on system accordingly. A PCR will be completed by the end of
month 15.
13
Consultative Group for Assisting the Poor; World Bank
Management Case
A. What are the Management Arrangements for implementing the intervention?
The programme will be managed by the DFID Burma Livelihoods Adviser with the support of the DFID
Burma Programme officer. The programme officer will be responsible for ensuring regular quarterly
reports are received from each programme partner and that these are submitted in a standard format.
Should there be evidence that disbursements are slow then the DFID programme officer or the
Livelihoods Adviser will meet with the implementing partner and discuss corrective action.
To ensure early read across between implementing partners and a greater sense of cohesion and
coordination within the programme, the Livelihoods adviser will meet quarterly with senior staff from the
implementing partners to discuss issues and to assess progress against targets in the logframe.
As a member of the LIFT Fund Board the DFID Livelihoods Adviser will be following progress on the
wider microfinance programme funded under LIFT. There are also programmes being funded under
LIFT in conjunction with the World Bank that will have an impact on the microfinance industry in Burma
such as the Financial Inclusion and Access to Financial Services studies. This includes the following
projects: (1) financial sector development programme which covers the master plan, legal
reform, financial infrastructure policy, and supervision; (2) investment climate assessment (ICA); (3)
financial inclusion for national development with a focus on the microfinance supervisory agency. The
findings and implications that these studies will have on this programme will be passed on to the
partners.
B. What are the risks and how these will be managed?
Although there has been dramatic and rapid change Burma still remains a medium risk environment
for microfinance. The Microfinance Law was only enacted at the end of 2011 and many of the clauses
and regulations have yet to be tested. The roles of the recently established Supervisory Committee and
the Microfinance Supervisory Enterprise Authority (MSE) are still be determined and the latter lacks
capacity raising questions over its ability to effectively implement the law. The LIFT/World Bank)
programme will support institution building and human resource development at the MSE.
While microfinance to the poor and unbanked is considered by many formal banking sector players as
too high risk, there are many example world-wide of successful group lending schemes that have
enabled millions to access small loans (in Bangladesh in 2003 some 8.3m borrowers were being
served by just 4 institutions). The success of microfinance in Burma, despite the limitations imposed on
the sector until last year, attest to the need for small-scale credit and the continuing high repayment
rates of around 98% show that the products offered are valued.
A detailed risk assessment of the programme is given in Annex 1. It identifies two categories of risk;
 External- those outside the control of the implementing partners which are due to natural,
political or world-wide economic factors. They would have an impact on all microfinance players
in Burma and as such require concerted action to address that is often outside the control of the
MFIs
 Internal – where the implementing partner’s own programmes and methodologies may be at
fault. If not addressed these could lead to operational and possibly financial failure. These risks,
provided they are identified and addressed in a timely manner, are often easier to manage as
they are more likely to be agency and even product specific.
C. What conditions apply(for financial aid only)?
Not Applicable
D. How will progress and results be monitored, measured and evaluated?
There is an overarching programme logframe drawing on and summarising the separate log frames
produced by each partner. The master logframe will be used to assess progress and performance of
each partner. The master logframe will form the basis for reporting against DFID’s Operational Plan
headlines which are “to meet a target of 110,000 women with access to financial services as a result of
DFID support by 2015).
Implementing partners will each submit a work plan and budget prior to each funding request that will
be scrutinised and approved if satisfactory. They will produce and submit to DFID Burma a short
quarterly progress report within one month of the end of the previous quarter that will summarise
achievements against their overall work plan and which will highlight any problems encountered or
expected in the next reporting period which might have an impact on delivery. Each agency produces
internal monthly Management Information Systems and if this detail is required could submit these to
DFID.
In addition, each partner will implement their own agency monitoring systems that are expected to
follow industry practices. As all three partners have existing micro-finance programmes operating in
Burma they have existing M&E systems and teams that will establish baselines and implement a
system of regular monitoring. New staff recruited to assist area expansion will be exposed to MIS
training and full hands-on experiences to ensure complete understanding of operational systems. Each
branch office submits monthly reports updating their HQ on programme performance. These reports
highlight case studies and personal stories that express lessons learned and successes but will include
delinquency cases (if any) and actions taken. Save the Children holds quarterly meetings with all
branch managers and regional office staff to organise and compile the quarterly reports and
assessments and discuss plans, targets and priorities for the coming quarter.
GRET through the Chin Microfinance Institute has a clear set of indicators against which it will monitor
progress.
Within one month after the end of the programme each partner will produce a final narrative and
financial report showing achievements against their logframe and against their project proposals. DFID
Burma will use these reports as the basis of its Project Completion Report. DFID Burma staff or an
independent observer on their behalf, will make at least one monitoring visit to an operational areas
served by each of the partners. This visit will review progress, assess outcomes and hold discussions
with field staff and clients to determine their views on operational efficiency, product suitability and
relationships between the loan agency and their clients.
The project will consider undertaking independent evaluations, possibly on coverage and effectiveness
at the mid-term review and on project impact and VFM at the project end to draw out lessons learnt for
possible scaled up programmes in future.
The project implementing partners have included physical and financial monitoring as key elements of
their programme while DFID will put aside around £26,000 for independent evaluations and reviews.
Lograme
Quest Number of logframe for this intervention:
Annex 1: Risk Analysis
Inherent Risk
Consequences
Mitigation Measures to Minimise
Risk
Likelihood
Impact
External risks
Drought or flooding in the
programme areas have the
potential to seriously reduce
crop yields or prevent/delay
planting so that a crop cycle
was lost
Ability of clients to repay their
agricultural production loans would be
seriously compromised exposing the
MFI to an unsustainable burden of
unpaid debts and possible mass default
:
Further funding cycles would be
delayed.
Wider impact on the local economy
would also have a knock-on effect for
owners of small businesses impacting
on their ability to repay loans
Number and value of the agricultural loan
components of the total MFI portfolio
carefully balanced or restricted to a fixed
percentage of the overall loan portfolio so
as not to skew programme
3
High
2
Medium
Clear response measures in place that
depend on the severity and extent of the
problem. Actions might include inter alia the
roll-over of loans, deferred payment
schedules and a possible reduction in
interest rates. All attempts would be made
to avoid default.
Moves to introduce crop/ weather
insurance schemes should be considered
Political interference or
patronage in the selection of
townships villages or clients
Rational business decisions on area and
client selection are distorted and lead to
possible increased politicisation of the
programme:
Establish clear and transparent criteria for
the selection of townships and for the
establishment of loan groups;
MFIs are refused permission to open
offices and to operate in politically
sensitive areas;
Need to be seen not to favour any one
political grouping in the selection of
operational areas and to communicate the
non-profit and apolitical nature of the
organisation ;
Use the internal politics and interests of the
preferred and selected townships to support
the establishment and expansion of
branches in mobilising opinion or lobbying
at State or Divisional level
Supervision and
understanding of the
Microfinance law and its
regulations and procedures is
weak and implemented poorly
Unsuitable new entrants granted
licences; prioritising profit over
sustainability
Laws and associated procedures
incorrectly applied so that microfinance
becomes poorly regulated ;
Weak monitoring systems result in
fragmentation of the sector
High inflation rates
Loan interest rates excessive and no
longer attractive for clients
Reduces value of capital held by
institutions which are then unable to
increase client numbers or expand into
new areas
Annual interest on
microfinance loans capped by
Government decree at
economically unsustainable
levels
MFIs unable to sustain their operations
and cease operating or at best are only ,
able to maintain existing client numbers
but cannot attract the capital required to
expand
The current interest rate of 2.5%/month
is only just sufficient to maintain
operational effectiveness;
Support will be provided by the World Bank
with LIFT financing to strengthen the
Microfinance Supervisory Enterprise to
establish an adequate regulatory and
institutional framework for microfinance.
2
High
2
Medium
3
High
Introduce international best practice that will
include advice on procedures, instructions
and standards to be issued to new
providers of microfinance
Partners will closely monitor the inflation
rate and should it rise will lobby the Small
Loans enterprise to take action. Internally,
partners will introduce strict cost control to
manage the inflationary impact
Loan products designed in conjunction with
clients to minimise repayment periods and
to reduce the impact of inflation
Concerted response by all MFIs to any
government moves of this nature.
Donor support has been requested to
strengthen the Microfinance Supervisory
Enterprise that regulates and provides
oversight to the industry. This will enable
MFI players to have a say and to influence
future decisions on setting interest rates for
the industry. .
Private equity MFIs interested in
expanding and investing risk funds in
Burma are deterred and invest
elsewhere.
Opportunistic statements by
local politicians, rumours and
negative local media reports
encourage the belief that all
outstanding loans have been
cancelled
Possible mass default on loans in
localised areas and mis-utilisation of
loans for other purposes;
Ensure early warning signs are reported
and rapid containment action taken;
Threats to those groups still willing to
pay
Improved dialogue with politicians
Build strong linkages with external
stakeholders and design a clear media
strategy and communications plan;
Potential violence against MFI staff
2
High
1
High
1
Low
Enhance and strengthen alliances with
national and international networks
Internal Risks
Weaknesses in the credit
lending model so that clients
no longer willing to participate
in the standard group lending
model used by all MFIs
Insufficient demand for loans and high
client drop out due to dissatisfaction;
Reduce group size for ease of transaction:
Weakened social collateral
Possible pipelining of loans to other
family members
Products on offer by the MFIs
or the repayment terms do not
address the needs and
expectations of their clients
Rethink the standard model;
Slow take up of loans resulting in few
clients seeking second or subsequent
loan cycles;
Consider offering more individual loans to
long-term and trusted clients but with more
careful screening
Ensure that the products on offerare those
that meet the needs of the client and which
offer convenience, quick delivery and
simple loan terms
Expansion plans on hold or abandoned
Clients utilise other sources of credit
both formal and informal
Improve client and loan officer relationships
to ensure rapid feed-back and to capture
any disquiet at an early stage
Donor pressure to expand into
new often marginal areas and
to promote high risk products
that may be unsuitable
Rapid expansion results in deployment
of untrained and inexperienced staff;
No or limited knowledge of the new
operating environment and the cultural
differences especially in more marginal
and ethnic areas.
Established and well tested products
may not be easily transferred to a
different agro-ecological environment
and may prove unsuitable
Delayed receipt of funds from
donor
Slow start up with potential clients
identified and activated but increasingly
frustrated by delays;
Possibility that key planting dates could
be missed as funds for the purchase of
inputs for the main monsoon crop
unavailable on time
Resist donor pressure to expand until fully
familiar with the situation in the proposed
new area.
4
Medium
3
Low
Ensure sufficient exploratory work
completed ahead of expansion and start
operations on a pilot basis while
establishing a presence;
Test the market and assess demand.
Maintain regular contact with funding
agency;
Provided information as and when required
to assist funds to be processed.
Keep clients informed on potential delays
and look to move funds internally to meet
any temporary funding delays
Likelihood/Probability : 1. Not likely; 2. Possible; 3. Likely: 4. Very likely; 5. Almost certain
Impact: High, Medium, Low
Annex 2: Client Numbers and operational areas by Township
and State/Region
PACT
Township NameRegion/State
Client Numbers
1.
2.
3.
4.
5.
6.
7.
8
KyaitLatt
Myaung Mya
Pathein
De daye
Lay Myathnar
KanGyi Daunt
Kyaunggon
Inga Pu
Ayeyarwady
Ayeyarwady
Ayeyarwady
Ayeyarwady
Ayeyarwady
Ayeyarwady
Ayeyarwady
Ayeyarwady
New townships
3.200
3 200
3 200
3 200
3 200
3 200
3 200
3,200
9
10
11
12
13
Pyapon
Simbagwe
Myaiktile
Mimbu
Myaothit
Ayeyarwady
Mandalay
Magway
Magway
Magway
Additional branches
3,200
3,200
3,200
1,450
1,450
Kyaw Mu
Twanty
Kunyangon
Yangon
Yangon
Yangon
Total PACT
*
*
*
38 100
Save the Children
14 ShwePyiTha
15 NorthOkkalpa
16 Thekone1&2
Yangon
Yangon
Bago West
Additional branches
3 000
1 650
4,400
17 Paan
18 Hlaing Bwe
19 Myawaddy
20 Kawkareik
Kayin
Kayin
Kayin
Kayin
New townships
1 300
1 300
1 400
1 400
Total Save the Children
14 450
GRET
21 Hakkha
22 Falam
23 Tedim
24 Thantlang
Chin
Chin
Chin
Chin
Additional branches
1 150
862
1 480
1 208
25 Tonzang or Matupi
Chin
New township
490
Total GRET
5 190
World Vision Myanmar
26 Patheingyi
27 Myaungmya
Mandalay
Ayeyarwady
28 Amarapura
29 Aungmyitharzan
30 Chanmyitharzi
31 Pyigyitagon
32 Kyaing Tong
33 Hlaingtharyar West
34 Hlaingtharyar East
35 Mingalartaungnyunt
36 South Dagon
37 Hmawbie
38 Pathein
39 Hpaan
Mandalay
Mandalay
Mandalay
Mandalay
Shan
Yangon
Yangon
Yangon
Yangon
Yangon
Ayeyarwady
Kayin
New township
400
120
Expansion of existing branches
766
1006
895
1120
920
987
846
528
628
486
800
500
Total World Vision Myanmar
10,000
Total New Clients
67,740

Townships applied for and if successful will replace three of those in Ayeyarwady
Region
Annex 3: Microfinance Implementing Partners- Background
and Approaches
DFID is providing direct support through four not-for-profit microfinance
organisations. All four have a history of working in Burma and have extensive
experience of the areas in which they operate. They are:
Pact
Under the programme DFID will provide £4.9m to Pact to expand its existing
programmes to a further 38,100 new clients in the Delta, Dry Zone and
Yangon regions.
Pact is a US-based microfinance organisation founded in 1971 as a
membership organization of U.S. private and voluntary organizations. It has
been operational in Burma since 1997 working as the implementing partner
for the UNDP Human Development Initiative. Originally one of three
microfinance providers to HDI by 2006 Pact was nominated as the sole
provider and had responsibility for implementing microfinance programmes in
the Delta region, the Dry Zone and in Shan State. Pact has continued its
expansion into new areas with new clients and products under both the HDI
and LIFT programmes and is now the largest MFI in Burma reaching over
500,000clients in 5,600 villages and 22 townships with an outstanding loan
fund of $55m. Of the active clients 97%are women and as a demonstrated
success model this project consists of about 82% of the country’s
microfinance market. With an annual growth rate of 32% Pact’s expansion
reflects a successful business model which has been encouraged and driven
by donor support.
Pact’s approach is two pronged:
1. Facilitating access to microfinance services to the poor using a group
lending methodology
2. Stimulating small business ventures through a range of critical small
enterprise and business support services including business education
training which orientates new clients to key principles of taking loans
To implement this PACT helps organise villagers into 5-member savings and
credit groups that provide financial services to various microbusiness
enterprises ranging from marginal farming, raising livestock to small scale
trading. The model is similar to the successful Solidarity Group lending model
pioneered by the Grameen Bank in Bangladesh.
Pact has been successful in providing clients with an array of loans, savings
and insurance products and by stimulating small business ventures through a
range of critical small enterprise/business development support services.
Under this programme Pact will provide credit to 38,000 clients (95% of whom
will be women) from rural households in 13 townships (5 existing where new
branches will be opened and 8 new townships. All townships are in
agriculturally rich regions where there is mix of, livestock, agriculture and
agro- business opportunities. Plans to expand operations into three additional
Yangon townships are subject to obtaining permission and a licence to
operate. As there are political sensitivities around allowing donor support to
these townships obtaining a licence to operate may not be as straight forward
as it is elsewhere but applications have already been submitted. If plans to
operate in these three townships are approved they will replace others on the
list in Annex 2.
Loans will be issued to clients to use as capital in their farming and related
agricultural and non-farm income generating activities. Pact already has a
diverse range of product packages tailored to meet the different credit needs
of clients. These packages include amongst others :
 Regular Income generating loan starting at $100 and then building up
at each loan cycle after successful payment to a maximum of $250;
 Micro-enterprise Loan provides a larger amount up to $1,250 based on
the capacity of profitability of the enterprise allowing clients to expand
their business;
 Health Care and Education loans at $65 for any member of the family
and for school enrolment:
 Agricultural Loan valued a $100-$300 per acre up to a maximum of 3
acres
Loans range in size from $65-$1,250 (£42- £800) and are issued without
collateral. Loan Officers carry out loan utilisation assessments within 2-4
weeks of the loan disbursement to ensure loans are being invested in
targeted activities. The Loan Officers will visit villages on collection dates and
collect regular payments over the 6-month loan cycle. However, as repayment
of agricultural loans depend on the crop cycle and time of harvesting; Pact
only collects interest payments and repayment of the principal sum is left until
after the harvest and the crop has been sold.
In addition, Pact will introduce two social protection interventions. These will
be ;
 A Beneficiary Welfare Fund where a small proportion of interest
payments and project incomes are set aside each month to establish a
Welfare Fund. By the end of the first year this client welfare fund will
provide all local borrowers with a safety net in the event of natural
disaster or loss of life:
 Promotion of Savings where Pact will educate borrowers on the value
of savings and ensure that all borrowers have a savings account to
draw on. Interest will be paid on savings made.
The beneficiary welfare programme will offer cash assistance and loan
forgiveness to participating clients in case of the loss of investment due to
death of the borrower or natural disasters. Under these circumstances the
project will pay a fixed cash sum to meet immediate needs and eliminating
their debt by writing off the loan and allowing the family to take on a new loan
to continue their business. Joining the welfare programme will a condition of
the loan but there will be no compulsion only encouragement to save and
earn interest on savings as clients who save are more resilient in times of
crisis.
Save the Children
DFID will provide £900,000 to Save the Children in Burma to bring sustainable
livelihoods to 14 450 poor women through the provision of financial services
Save the Children (Save) has been operating in Burma since 1995 and now
has a presence in 10 states and regions. It has a valid MOU with the Ministry
of Health and the Department for Social Welfare in its target areas that
allowed it to operate as a microfinance institution. Recently Save received
registration as an NGO to operate more widely in Burma and has secured its
Microfinance licence in Burma from the MSE. Under its MOU with the Ministry
of Health Save started its microfinance programme in 5 peri-urban townships
of Yangon in 2002 targeting poor women to improve household economic
security so that the family, and especially children have access to a healthy
diet and basic services. Until the elections of November 2010 Save had
reached >16,000 clients but along with others working in “sensitive areas” it
had to suspend operations in Yangon and was not able to resume operations
until mid-2011. When it did so it did not return to all areas previously covered
and now operates in 2 townships in Yangon Region, and one each in
Ayeyarwady and Magway regions.
Under this programme Save will provide credit to 14,450 new clients, all of
whom will be women from rural households in 7 townships covering a mix of
peri-urban in the south of the country and will begin new operations 4 rural
townships in Kayin State.
The target population for the Save programme will be women from lowincome families and women-headed families primarily in urban and peri-urban
areas. Again the methodology used will be the group guarantee lending and
savings model where members form their own groups of at least 10 members
provide a vital guarantee mechanism responsible for each other’s loans so
that if one defaults the others take on responsibility for repaying the loan.
Save will offer both credit and savings services with:
 Productive loans varying from $50-$150
 Social loans from $40-60 with loan terms of 6 months through weekly
repayments.
Save will also offer a saving service for clients who are able to save US 50
cents/month without incurring any additional transaction costs. They will
receive interest on these savings at a rate of 1.25%/month. Should for any
reason a client wishes to drop out of the group then she will be able to
withdraw her saving deposit in full. Save will expand its operations in three
townships; two near Yangon and one in western Bago Division. This
programme offers Save an opportunity to open a new microfinance
programme in Kayin State in four townships where it has other development
programmes. This will ensure complementarities and the opportunity to offer
clients a package of technical advice, support and microfinance services to an
initial client base of 5,400 households who will be able to access > £250,000
in loans.
GRET
DFID will provide GRET with £670,000 to provide savings and credit services
to 5,100 households in Chin State, the poorest state in Burma.
GRET is a French development agency operational for the past 35 years. It
has been in Burma since 1995 with support from UNDP/UNOPS working in
the areas of agriculture and livelihoods, food security, income generation and
microfinance. It has established and consolidated microfinance institutions in
northern Chin State and in Southern Shan State. From 2009-2011 the
microfinance component of the programme was financed by the European
Commission extending the network to new villages and townships. The EC
also supported the development and distribution of a new product the microenterprise loan. This programme will allow both the extension of its outreach
in existing townships and expansion into a new township. Besides being
registered to operate as an NGO in Burma, GRET was also the first
international NGO to be granted a microfinance licence to operate in Burma
and it has active and pending MOU with a number of Ministries and
Departments that will allow it to operate more widely in border areas.
GRET has established the Chin Microfinance Institution (CMI) covers >6,100
households in four townships in northern Chin state where GRET operates
development programmes. GRET controls the flow of funds to CMI and has
direct management and audit control although the intention is to get a
separate licence for CMI to operate independently In order to expand and
provide loans to poor households CMI requires additional capital and
operational expenses. Under this programme DFID will provide GRET with
credit facilities and operational expenses sufficient to recruit an additional
5,190 clients from rural households in four existing and one new township
(almost doubling its client base). Project funds will be used to increase
operations and recruit new clients in 99 existing villages and expand to 17
new villages in townships where GRET operates livelihoods interventions.
DFID funds will be used to expand microfinance operations into a new
township; either Matupi or Tonzang depending on the results of feasibility
studies. Matupi township was badly affected by crop failures last year that
required emergency food assistance provided by the World Food Programme.
While microfinance directed at the poor is a recognised necessity it may be
too early to open new branches so soon after emergency food distributions
and while recovery is in its early stages.
GRET will provide access to savings and credit services to families who are
unable to provide guarantees or collateral for bank loans and to install
knowledge of financial savings and an understanding of economic activities in
a market economy. Two models are used:
 Village Credit schemes which are managed by committees selected by
the members themselves. Financial services are again based the
mutual guarantee of the loan amongst groups of 5 members. The size
of the loan varies between Kyat 80-120,000 for a loan duration of 12
months based on the need of the borrower. Interest is paid monthly at

2.5% with the capital returned as a lump sum at the end of the loan
period.
A recently introduced micro-loan product that provides capital for
entrepreneurs wishing to open small shops or for the purchase of
animals for breeding. The maximum size of these individual loans is up
to Kyat 600,000 with loan duration of 18 months, again with monthly
interest payments and the capital repaid at 20% after 12 months and
remainder at 18 months.
GRET through the CMI is considering implementing a life insurance product
that will meet the repayment cost of the outstanding loan following the death
of the client. They will look at a range of products and adapt to local
conditions.
World Vision Myanmar
DFID, through a partnership with World Vision in Burma will provide £1.045m
to bring sustainable livelihoods to 10,000 poor households. Some 4.825, new
clients (80% of whom will be women) will receive financial services to support
income generation activities. Additionally, 5,000 existing clients with income
generation activities will be sustained and increased through the provision of
additional business capital. Education loans will be extended to 175 parents
in one township to continue an innovative field research into the social impact
of education lending.
The total number of estimated beneficiaries
(microfinance clients and household dependents) through this partnership is
50,000.
World Vision Myanmar (WVM) began work in Burma in 1958, with an
uninterrupted presence since 1991. Currently, activities cover 11 of the 14
states and regions, through a network of 35 Area Development Programmes.
WVM has active, long-term MOUs with the Ministries of Health, Agriculture,
Social Welfare, and Border Affairs and is also fully registered with the Ministry
of Home Affairs.
WVM’s microfinance program began in 1998 and has increased over time to
12 township service centres in five states and regions, consisting of
Ayeyarwady, Kayin, Shan, Mandalay, and Yangon. In compliance with 2011
microfinance legislation, WVM received a microfinance licence in 2012.
WVM Microfinance’s operates in varied township contexts consisting of rural,
peri-urban, squatter communities, and urban. Approximately 80% of WVM’s
clients are low-income female entrepreneurs focused on independent
livelihoods to meet the expenses of their children and household dependents.
Under this programme, loans averaging $178 will be available to 4,825 new
clients, across 14 townships. An additional 5000 existing clients will receive
loan capital to meet the growing capital needs of their income generation
activities in the agriculture and commerce sectors. Female borrowers will
constitute at least 80% of these clients. Two new peri-urban township service
areas, one in Upper Burma (Patheingyi) and one in Lower Burma
(Myaungmya) will begin under this funding program. Additionally, service
expansion within existing townships will occur in 12 new areas.
The target population is largely women from low-income families and womenheaded families, primarily in urban and peri-urban areas. A group lending
methodology will be used to guarantee lending, wherein members form their
own solidarity groups of 3 to 5 borrowers. The group provides a vital
guarantee mechanism, so that lenders are responsible for each other’s loans.
New clients receiving WVM loans will have access to capital ranging from
$118 to $294 depending on the financing requirements of the livelihood effort.
Agriculture activities, typically, require larger initial loan sizes than other
activities. Additional financing will be provided to 5,000 existing clients to
support the growth of their livelihood activities. An added benefit from these
activities is not only increased household income but employment creation for
clients with loan sizes between $600 and $1,200.
At the request of community leadership, WVM piloted education loans,
averaging $60, in three townships to support children’s education expenses at
the beginning of the June 2012 school year. The social impact of these loans
is encouraging, and repayment rates are nearly 100%. Support to after-school
tuition expenses, education loans will continue with DFID funding in one
township for 175 parents. Based on the experience gained, WVM’s education
lending methodology will be refined with an aim toward increased outreach
next school year.