Myanmar: IFC Report Finds Huge Unmet Demand for Microcredit
Myanmar, June, 08 2013 -
Demand for microcredit is about US$1 billion a year, about four times the amount available, according to a study by the International Finance Corporation that highlighted the need to build up the sector.
“Fewer than 20 people out of 100 have access to formal financial services, with most people relying on family savings or costly alternatives such as informal money lenders,” the IFC said, adding that the market was large enough to attract domestic and international lenders.
“The market among Myanmar’s total population of around 60 million is large enough to attract domestic and international banks that could significantly improve outreach and contribute to innovation in the sector,” the IFC said.
Total outstanding loans in Myanmar are estimated to be US$283 million, it said.
The IFC described its report as “the first comprehensive publicly available assessment of the microfinance landscape in Myanmar since the enactment of country’s microfinance law in late 2011”.
“The current microfinance law clearly signals government commitment to financial inclusion. We recommend that Myanmar’s financial regulators and supervisors adopt international good practices for microfinance as quickly as possible,” said Eric Duflos, one of the report’s authors.
The IFC itself last month announced that it had ventured into the microfinance sector by lending Cambodia-headquartered Acleda Bank’s microfinance venture here $2 million.
As one of the poorest countries in the region, Myanmar lacks banking and financial services for low- and middle-income people, the IFC said. Lack of access to financial services leaves those in need of loans no option besides informal lenders who often charge high interest rates.