Pact’s Microfinance Project in the Wake of Cyclone Nargis

Pact brought its Microfinance Project (MFP) to Nyein Oo village in Myanmar’s Mawgyun Township in 1997 with an open meeting to introduce villagers to the project’s goals and the requirements for participation. Daw Htay Hlaing attended the meeting and became interested in the possibility of starting a new business by participating in the MFP. At that time, Daw and her husband owned two acres of land, a small boat and a house made of bamboo. They farmed their land, and Daw’s husband fished to provide income for his family of five during the lean season. Daw saw that a new business could provide greater income and security for her family, and knew that Pact’s MFP could help her reach this goal.

Daw took out an initial loan of 6,000 kyat (about US$6) from the MFP and invested in a duck-raising enterprise. She was easily able to repay this loan using income gained from selling her ducks’ eggs, and her success encouraged her to take out a second loan of 8,000 kyat to expand her livestock operation to include pigs as well. Daw then took advantage of the MFP’s agricultural loan option, using this funding to engage in paddy cultivation on her two acre plot. Strong yields provided sufficient income for the purchase of a third acre, increasing Daw’s agricultural potential. Subsequent loans over the course of about seven years provided the resources necessary for purchasing two cows, two buffaloes, five more acres of land, a tractor and a water pump. The extra income generated by Daw’s expanding businesses was also directed toward improvements in her family’s home in the form of tin-sheet roofing and wooden walls, while also allowing her family to establish an MFP savings account.

Daw’s hard work and access to finance through the MFP was paying off in a big way when tragedy struck on May 2, 2008 in the form of Cyclone Nargis. The storm ripped through her village and destroyed everything she had built. Daw explained “After the cyclone, we couldn’t even find a place to live in, and we had to live with other families in the village monastery.” Similar stories of destruction and loss were heard throughout the areas where Pact was implementing the MFP, jeopardizing the well-being of the project’s beneficiaries. Pact responded to this situation by delivering relief packages, providing immediate assistance to families in need. In addition, the MFP recognized the hardships the storm caused for its borrowers by allowing immediate withdrawal of all savings and forgiving outstanding debts. For Daw Htay Hlaing, this meant that she no longer had to pay 144,000 kyat she had borrowed for her businesses while she gained access to 35,230 kyat she had been saving.

Ten months after Cyclone Nargis hit, Pact returned to Nyein Oo to restart activities under the MFP. Each former client applied for 150,000 kyat initial loans, and Daw used hers to purchase two pigs and open a grocery shop. She also began to sell necklaces she made herself. Later, she took out an agricultural loan that allowed her to take advantage of the monsoon season by cultivating paddies, saving her family from the high-interest rates charged by traditional lenders. Daw used income from these activities to continue rebuilding her home, getting a new start thanks to the MFP. As Daw said “More investment means more income to rehabilitate our lives.”