UNCDF in Myanmar | UNCDF

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UNCDF in Myanmar

UNCDF in Myanmar

The Challenge

Of Myanmar's population of 60.9 million in 2013, 39.7 million are estimated to be adults. More than 32% of adults live on less than US$2 per day and 72% on less than $10 per day. More than 50% of the population have no access to financial services, 30% are using unregulated services and only 20% have access to regulated financial services. The limited access to regulated financial services not only impose significant costs on poor people given interest rates of up to 240%-a-year compared to up to 36%-a-year for regulated services, but informal mechanisms also offer clients limited protection, less choice and lower returns. The resources of the poor are also not captured in the formal financial system with one of the lowest 10-year average domestic savings rate in the world, constraining both domestic investment while increasing dependence on foreign capital and aid. Progress in expanding the reach of regulated financial markets has been limited by an absence of a clear roadmap and national strategy based on reliable market evidence and data, while years of isolation has led to a highly under-developed financial market infrastructure and human resource capability that are essential to expand services at scale.

How We Are Helping?

In Myanmar, UNCDF is helping to create inclusive financial sectors by providing access to financial services for individuals and micro and small businesses through the Making Access Possible programme (MAP), the MicroLead Expansion programme, the Expanding Financial Access project (EFA) and the Shaping Inclusive Finance Transformations programme (SHIFT).

Funded by Livelihood and Food Security Trust fund (LIFT), the purpose of MAP was to expand financial services for individuals and small businesses by defining the financial inclusion agenda in Myanmar and aligning resources with key priorities, based on a rigorous evidence-based diagnostic exercise concluded by intense stakeholder dialogue and decision making. This programme was closed in October 2014 and acted as the foundation for the Financial Inclusion Roadmap 2015–2020 approved by the government in February 2015 and launched during Queen Maxima of Netherlands’ visit in April 2015.

Funded by LIFT as well, the MicroLead programme is largely motivated by UNCDF’s wider perspective on combining interventions that expand access over the short term while reinforcing a core approach of developing financial markets over the medium by smartly using subsidies and its lending and guarantee instruments. Myanmar MicroLead is part of a larger programme started in 2009 when UNCDF, in partnership with the Bill & Melinda Gates Foundation, initiated a flagship global microfinance programme to provide loans and grants on a competitive basis to microfinance institutions, commercial banks and financial cooperatives based in developing countries and pursuing a savings-based approach to expand operations to underserved markets. The programme’s goal is to reach 525,000 new clients by 2017 at least half of whom are women and at least half of them are rural dwellers.

The EFA project aims at strengthening the financial sector by 2020, enabling it to better support financial inclusion, with formal inclusion in Myanmar increasing from 30% to 40%, percent of adults with more than one product increasing from 6% to 15%, and a full range of affordable, quality, effective and responsible financial services being available to the target clients (MSME, small-scale farmers, women-led enterprises, youth, poor and low-income) by getting all stakeholders to work together in an integrated manner: 830,000 low-income beneficiaries (a minimum of 50% women) will directly benefit as a result of the project, and 3,000,000 will benefit indirectly).

SHIFT is a regional programme operating in Cambodia, Laos, Myanmar and Vietnam (CMLV). It aims to improve the current level of financial inclusion in the CMLV countries by facilitating the transition of low-income people’s use of financial services from informal mechanisms to formal, regulated and higher value services. This transition enables low-income people to increase their productive investments, consumption stability and asset ownership. The SHIFT programme will adopt a regional and pro-poor market development approach that would achieve economies of scale in addressing shared policy, market constraints and opportunities particularly across small-scale national financial systems. In addition, short-term interventions having direct impact and long-term transformational interventions are expected to address systemic market constraints.

 

In Detail

 

Project

 

MAP

GoalTo support expanding access to financial services for individuals and micro and small businesses.
How

Making Access Possible (MAP) is a diagnostic and programmatic framework to support expanding access to financial services for individuals and micro and small businesses. The MAP framework creates the space to convene a wide range of stakeholders around evidence-based country diagnostic and dialogue and leads to the development of national financial inclusion roadmaps. The roadmap identifies key drivers of financial inclusion and includes specific actions that will contribute to greater financial inclusion.

PeriodOngoing (2012-2013)
PartnersFinMark Trust and Cenfri
Total project cost and UNCDF contribution1,396,472
500,000
Progress 
Budget 
Results (including scaling and policy impact) 
Project

Microlead Expansion

GoalTo contribute to the development of strong inclusive financial sectors and the achievement of the MDGs.
How

MicroLead leverages:

• The catalytic role ‘market leaders’ can dramatically expand scale of retail services based on proven business models and also shape norms and standards of practice in underserved markets that can help to drive overall market development.

• The role of market leaders to crowd in and attract investors to capitalize or refinance lending portfolios, allowing public institutions to limit their investments to smart subsidies.

• The need to meet the demand from low-income people for opportunities to save through safe, convenient and flexible products that are provided alongside opportunities to borrow, which market leaders are more capable of delivering safely.

PeriodOngoing (2012-2017)
PartnersLIFT Myanmar
Total project cost and UNCDF contribution7,306,262
 
Progress 
Budget 
Results (including scaling and policy impact) 
Project

Shaping Inclusive Finance Transformations (SHIFT)

GoalTo establish a regional financial-market facilitation, technical assistance and funding facility in order to improve the current level of financial inclusion in the ASEAN region.
How

• Policy Research and Advocacy – Enable adoption of strategies and mechanisms for more integrated pro-poor financial markets supported by responsive regulation and supervisory arrangements

• Financial Inclusion Data and Analysis – Deliver high-quality data and analysis on demand, supply and regulation, applied through regionally standardized methods

• Capital Incentive and Technical Assistance Fund Facilities – Promote partnerships and service delivery models to decrease cost of financial intermediation and increase access to finance

•Capacity Development – Deliver high-quality, demand-driven, human resources to support an increased mobility of the labour sector

PeriodOngoing (2014 - 2020)
PartnersAustralian Department of Foreign Affairs and Trade (DFAT), FinMark Trust and Cenfri
Total project cost and UNCDF contributionUSD 26,452,144
USD 547,500  
Progress 
Budget 
Results (including scaling and policy impact) 
Project

EFA

GoalBy year 2020, the financial sector is strengthened and is able to better support financial inclusion, with formal inclusion in Myanmar increasing from 30% to 40%, percent of adults with more than one product increasing from 6% to 15%, and a full range
How

• Strengthen the policy and regulatory environment, including enhancing the capacity of the regulators to implement the Financial Inclusion Roadmap

• Strengthen the capacity of selected market participants (FSPs and cooperatives), including through a Market Development Facility and targeted technical assistance to increase their capacity to deliver financial services according to global standards; The Market interventions will help develop sustainable practices for FSPs targeting the low income segments in Myanmar

• Knowledge Management and Sharing: Learning and knowledge dissemination to dynamically adapt the project over time, and to encourage good practices in the regional financial inclusion agenda and hence contribute to the global financial inclusion agenda

Period2015-2020
PartnersUNCDF, UNDP, PGMF
Total project cost and UNCDF contributionUSD 25,414,052
USD 300,000  
Progress 
Budget 
Results (including scaling and policy impact) 

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