Myanmar, December, 14 2016 - Access will improve to much-needed capital in Myanmar’s microfinance sector following an agreement between The Currency Exchange Fund (TCX) and the Livelihoods and Food Security Multi-Donor Trust Fund (LIFT).

Myanmar’s microfinance providers need to access significantly more funds in order to expand and satisfy the microfinance needs of the population. The volatility of Myanmar’s currency makes lending in Myanmar kyat (MMK) unattractive for foreign investors.

“Access to financial services remains one of Myanmar’s most pressing development challenges,” said Andrew Kirkwood, LIFT’s Fund Director.

“Improving access to finance is critical to expanding rural households’ economic opportunities and generating positive social and economic benefits for the country. LIFT is committed to promoting and developing the rural financial markets to be inclusive, so the poor, women, farmers, small businesses, landless and internally-displaced people can access quality financial services and take advantage of economic opportunities,” Mr Kirkwood said.

TCX provides a service that enables investors to lend in local currency to Myanmar’s microfinance
sector, while protecting them from any MMK exchange rate volatility. LIFT’s funds will be used to
subsidize the interest rate levels of these local currency loans.

The facility was launched on December 1st and was vastly oversubscribed, demonstrating the appetite of impact lenders for microfinance institutions in Myanmar. The resulting increased investment to microfinance providers is expected to generate around 400,000 microfinance loans over three years and support millions of USD funding, denominated in MMK.

“We are very satisfied that the facility is such a huge success. It shows the important role blended finance solutions can play in supporting the growth of the microfinance industry,” said TCX CEO Ruurd Brouwer.

“This perfectly fits our role as a catalyst for market development, as the facility will help microfinance institutions to gradually absorb debt costs at levels closer to where commercial rates are at the moment,” added Jerome Pirouz, TCX Senior Vice President.

LIFT currently funds 42 financial institutions that are active in 222 townships across Myanmar, serving more than 1 million client households. LIFT’s implementing partners report achieving 97-100 percent repayment rates on loans. TCX, based in The Netherlands, began accepting applications from lenders on December 1st, 2016.