IFC helping Myanmar microfinance institutions enhance performance with sustainable practices
IFC is helping Myanmar microfinance institutions improve their governance and risk management practices to enhance their performance.IFC | Updated: 13-06-2018 02:38 IST | Created: 13-06-2018 02:38 IST
IFC, a member of the World Bank Group, is helping Myanmar microfinance institutions improve their governance and risk management practices to enhance their performance. This is likely to increase their ability to adopt responsible and sustainable financing practices, subsequently helping them to expand lending to microenterprises and the poor.
Since the country opened up in 2012, Myanmar's nascent microfinance industry has been rapidly growing. Today, there are more than 170 microfinance institutions serving around 70 percent of the population living in rural areas – many of whom are low-income earners.
Given the scenario, IFC, along with the Myanmar Institute of Directors (MIoD) and the Myanmar MicroFinance Association (MMFA), is organizing a two-day training event on corporate governance for microfinance institutions, starting today.
Guided by IFC experts, around 30 board members and senior executives from Myanmar's microfinance institutions will discuss the challenges they face, learn about international best practices on corporate governance, and gain insights into developing plans to strengthen their lending practices.
"With the enactment of the Myanmar Companies Law, microfinance institutions are expected to improve their risk management practices and resort to other corporate governance reforms," said U Minn Aung, Chairman of MMFA, whose members provide $600 million worth of loans to 3.2 million clients. "This is a timely and much-needed training for these institutions to expand their client-servicing capabilities and achieve sustainable growth."
Regulators and investors have been urging corporations and institutions across the world to enhance corporate governance practices through improved competence of board directors, effective internal control, and risk management practices, among others.
"Stronger governance and risk management practices will help Myanmar's microfinance institutions perform better, inspire investor confidence, and increase access to capital, which is currently a significant concern," said U Aung Zaw Naing, Chairman of MIoD's interim Board of Directors and Group CEO of Shwe Taung.
This training is part of IFC's Myanmar Microfinance Program, which aims to improve financial access for low-income households, encourage more sustainable and responsible lending practices, and support the sustainable development of the microfinance sector.
The program is supported by the multi-donor Livelihoods and Food Security Trust Fund and the State Secretariat for Economic Affairs of Switzerland.
"Strengthening the transparency and governance of Myanmar microfinance institutions will improve their efficiency and their ability to lend to microenterprises," said Vikram Kumar, IFC Country Manager for Myanmar. "This will, in turn, support Myanmar's economic growth and benefit millions of micro-entrepreneurs and low-income households."
In addition to providing training, IFC has also invested $21.5 million in Myanmar's microfinance institutions to address the country's critical needs for financial services.