Sustainable Livelihoods through Microfinance for the Poor
Name: Sustainable Livelihoods through Microfinance for the Poor
Duration: July 1997 - December 2010
Donor: United Nations Development Program (UNDP)/United Nations Office of Project Services (UNOPS)
The Sustainable Livelihoods through Microfinance for the Poor project was first introduced in 1997 and extended in 2008 under the UNDP's Human Development Initiative program to address the lack of access to working capital for the rural poor in Myanmar. Initially working only in Myanmar's Dry Zone, in March 2008 Pact assumed management of the UNDP's microfinance projects in the Ayerwaddy River Delta and Shan State.
Pact based the design and delivery of the microfinance project on its Capital Plus philosophy, which is based on the belief that long-term poverty alleviation is attained through the combined development of:
- Financial capital in the form of savings and credit for the poor
- Institutions in the form of sustainable microfinance organizations
- Human resources in the form of informed and empowered clients.
Pact's approach encompasses a two-pronged strategy that consists of 1) facilitating access to microfinance services for the poor using a group lending methodology, and 2) stimulating small business ventures through a range of critical small enterprise/business development support services. To implement this strategy Pact helps organize villagers into five-member savings and credit groups that provide financial services to varied microbusiness sectors, from marginal farming to small trade activities. The loan processing and paperwork is based on a simplified format designed for use by preliterate managers and clients.
Pact's microfinance project now includes 245,000 active borrowers across Myanmar's Dry Zone, Delta Region, and Shan State with a capital and outstanding loan base of nearly $10 million. Over the life of the project in all three regions nearly $50 million has been issued in loans with a 99.98% repayment rate. The success of this program has made the Microfinance Program in Myanmar one of the 20 largest in the world outreaching to over 387,191 members with an average outstanding loan of US$58.47 and continuing to grow each year. Pact's commitment of community participation is realized in the 6462 villages in which 8907 credit organizations or "centers" are formed. These community organizations constitute the institutional foundation for the long-term viability of Pact's microfinance project. After the devastating 2008 Cyclone Nargis the Microfinance Project shifted into a relief effort. After a period of recovery, by May of 2009, Pact was successfully able to cross pre-cyclone levels of lending and continues to lend and assist those in need of loans throughout the country.
Partners
UNDP/UNOPS
8907 local credit organizations
Staff contacts
