Myanmar Startup Takes on Moneylenders With Short-Term Microfinance Loan Options
Thursday, October 13, 2016
Debt is a huge problem in Myanmar. Data is scarce, but in many poor communities on the outskirts of Yangon experts believe the majority of households are in debt.
Banks lend only with collateral – such as land or gold – which many poor families do not have. Microfinance is expanding, but the amount poor households borrow is often too small for traditional MFI loans, which average around K250,000 according to USAID.
The US government organisation recently started a US$10 million guarantee program with five local MFIs to help them provide loans of up to $5000. That initiative is aimed at helping mostly female-owned businesses grow operations and hire workers.
ZigWay – a Yangon-based start-up co-founded by Miranda Phua and Laurent Savaete – is targeting the other end of the microfinance spectrum. Ms Phua says that in poor Yangon townships someone might want to borrow K20,000 for a week or a smaller amount for just 24 hours. This is where informal lenders thrive.
Source: Myanmar Times (link opens in a new window)