Micro lenders eye growth paths in Myanmar
Monday, September 30, 2013
Myanmar’s MFIs – which often have government or NGO roots – are looking at ways to borrow larger amounts of capital, receive equity investment and turn profits as large, often foreign-funded commercial MFIs begin setting up shop in the country.
World Vision’s MFI arm currently operates as an NGO, but its managing director Neal Youngquist said it is the first NGO operating domestically to pursue a transformation to a commercial licence. “The finance sector in Myanmar is evolving and emerging at the moment,” he said.
“You have to be flexible, as World Vision is doing when it contributes perspective and advice.”
World Vision aims for its MFI branches to operate as a separate entity under a commercial licence, as it allows for improved internal governance and access to international wholesale lenders, he said.
There is no restriction on NGO-licensed MFIs turning a profit, but some insiders say it is more acceptable for image reasons to show profits as a commercially-licensed institution. A commercial licence also clears the way for potential equity investment, while outside support to NGOs is often limited to technical assistance.