Myanmar caps microfinance loans at $500, sparking MFI concerns about small business growth
Wednesday, February 19, 2014
A new directive in Myanmar caps microfinance (MFI) loans at $500, which has the sector worried that small business growth could be stifled even as it expands its role within the Southeast Asian economy.
The industry has experienced considerable growth in Myanmar in the last two years, as the previously closed-off economy opened and internationally backed financial institutions have capitalized on the estimated 84 percent of Burmese who have no access to financing, the Myanmar Times reported on Monday. To date, there are about 150 MFIs operating in the country, providing financing options for the impoverished population.
In an effort to enforce responsible lending, the Microfinance Supervisory Committee (MSC), Myanmar’s regulatory body for the MFI sector, has announced a new directive on Jan. 14 that capped microloans at about $500.