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Credit Access in El SalvadorThe country of El Salvador is known for being the smallest and most densely populated country in Latin America. It has the twelfth-highest GDP in the Americas. A large portion of its economic growth comes from remittances.

Meanwhile, agriculture, which had fallen off in the 1990s, continues to play an important role in the economy as it employs 25 percent of the country’s labor force. Coffee and sugar, El Salvador’s main exports, account for a significant portion of the agricultural sector. But despite its comfortably high GDP, 32.7 percent of its citizens live in poverty.

A significant obstacle to alleviating poverty is limited credit access in El Salvador. In particular, while banking is common and easy to obtain in larger cities like San Salvador and Santa Ana, the poor, especially in rural areas, have the most difficulty. Of the 40 percent of the population with low income, only 6 percent have accounts at financial institutions. And while access has grown, most banks do not have branches outside of the major cities.

To combat this, in 2013 the World Bank funded and developed a program that, through technical assistance, supported the Salvadoran authorities in developing legal frameworks and financial services. The World Bank team provided a framework for financial correspondents (third parties such as grocery stores and pharmacies) that authorized them to provide basic financial services. As well, the World Bank provided feedback on models of regulation for mobile banking and electronic banking.

Through these efforts, the World Bank was able to legally enact a framework that allowed for those third-party groups to carry out basic financial services. And between December 2013 and May 2014, basic banking transactions through third parties totaled nearly US $45 million. By utilizing technical channels outside of banks themselves, the World Bank has been able to provide credit access in El Salvador for all its citizens.

And in 2010, the International Finance Corporation, which is a part of the World Bank, financed a $30 million project specifically for micro-financing. Based on remittance flow, which accounts for more than $2.8 billion of El Salvador’s GDP, this project will establish a new funding platform for Fedecredito, a cooperative of 55 El Salvador credit unions and banks. Through support from the World Bank, which will grow Fedecredito’s portfolio by up to 25 percent, Fedecredito hopes to use this new structure to give credit to over 30,000 micro-entrepreneurs.

Through these programs, credit access in El Salvador has improved, especially for the rural poor. As these projects continue and El Salvador gains more stability, hopefully, their citizens will have more economic freedom.

– Nick McGuire

Photo: Flickr

Credit Access in Sri LankaSri Lanka and its citizens can benefit greatly from credit access. As an island country in South Asia of many languages and ethnicities, it has, of course, been a product of dispute for many years. A democratic republic, political unrest and ethnic divide have been a main source of disarray as noted by its thirty-year civil war which ended in 2009. But besides political issues, Sri Lanka is an economically stable country in South Asia, with a high Human Development Index rating and a per capita income that ranks highest among South Asian countries. Its main economic sectors are tourism, textiles, rice products, and tea, of which it is the second-largest exporter in the world. Similar to most countries, however, while there is certainly stability, Sri Lanka does have its issues.

Sri Lanka still has a large number of citizens who live in poverty. While only 1.8 percent of Sri Lankans live in abject poverty, nearly 45 percent live on $5 or less a day. It is difficult to maintain a stable income, especially in rural areas. It is even more difficult to achieve personal growth when income covers expenses and there is little left over.

Credit Access in Sri Lanka

That’s why credit access in Sri Lanka, especially in rural communities, is an important stage in its continued development. In a report from 2005, the World Bank Group discusses the best methods of increased access for the rural poor. For example, enhanced remittances and payment services, and long-term saving instruments are highly useful for the poor and can be implemented in small and rural enterprises.

 

Remittances

Remittances, particularly, have grown rapidly in Sri Lanka. As the report states, Sri Lanka should move from an informal, unsafe network to a formal financial institution with better services, such as savings and insurance. This improvement in credit access in Sri Lanka will allow citizens to manage their financials with lower risks.

 

Loan Access

A 2011 assessment by the World Bank concluded that only 35 of Sri Lankan small firms can access a loan or a line of credit. Then, in 2013, Sri Lanka’s Credit Information Bureau (CRIB) and the World Bank agreed to boost credit access by making it easier to use movable assets as collateral. The World Bank will help CRIB to develop a legal framework that allows small businesses to mortgage inventory and equipment to bypass the traditional loan agreements.

 

Loans to Boost Credit Access

And in 2016, the Asian Development Bank (ADB) and LOMC (the nation’s leading microfinance institution) inked a $25 million loan agreement to boost credit access in Sri Lanka, specifically for small businesses and individuals. Under the agreement, LOMC will use the loan as funds for lending to micro-businesses and will improve financial products and outreach to remote farmers. LOMC hopes to improve access to banking, as 70 percent of citizens do not have any access, and, because the deal lasts five years, have the sources for long-term loans.

Sri Lanka continues to grow, and with these credit-based programs and findings, it will do so in a stable and financially viable direction. Hopefully, within the next decade, a majority of the population will have access to banking, and credit will allow for the rural poor to lead more economically independent lives.

– Nick McGuire

Photo: Flickr

Credit Access in NicaraguaAs the largest country in the Central American isthmus, Nicaragua has also struggled for decades as the poorest country in the Americas. After suffering hereditary military dictatorship by the Somoza family that unevenly distributed the already meager national wealth, the country has taken steps to redistribute wealth as a democratic republic. However, 48 percent of its citizens live below the poverty line, with 79.9 percent surviving on $2 a day. Credit access in Nicaragua is deemed one way to a better economic future.

Need for Strong Credit 

Currently, agriculture and tourism are the largest industrial sources in Nicaragua. Agriculture makes up about 60 percent of its total annual exports with crops such as coffee and tobacco. While the stability of these industries helps with economic growth, one of the most important aspects of economic autonomy is improved credit access in Nicaragua. A stable financial system contributes to a country’s growth, and an inadequate credit system weakens it.

The civil war of the 1970s and hyperinflation in the 1980s severely hampered credit access in Nicaragua and the development of credit unions. For farmers, the civil war and land reform caused uncertainty regarding property rights in the legal system and many poor farmers cannot use property titles to support loans.

Purchase for Progress

These are the reasons why the World Food Program set up the Purchase for Progress (P4P) program. With this program, farmers can receive higher loans than those offered by banks. Since 2008, P4P has set up a revolving fund of over $400,000 with interests considerably lower than private bank rates. Through this program, it’s much easier for farmers to make a profit with better inputs and higher yields.

Microcredit

The previously mentioned program also highlights a significant style of credit access in Nicaragua: microcredit. The microcredit movement which focuses on small loans and access for those who do not have much to support loans, like farmers, began in the 1990s. The Winds for Peace Foundation (WPF) is another organization that provides a framework for increased access to credit for small-scale farmers through its Local Development Fund, which was founded under NITLAPAN, a research institute in Nicaragua.

Originally, WPF invested in multinational microcredit groups that provided capital and low-rate loans across Central American countries. Soon after it began to support Nicaraguan groups because of their reach into the agricultural sector. By placing the support in Nicaraguans, this program allows for both credit access and for a Nicaraguan institute to autonomously control the path of money and support.

World Bank Improvements

In 2008 the World Bank enacted a plan to provide more financial services and credit across Nicaragua. Through technical support, the World Bank focused on major needs such as

  • improvement of regulations for microlenders;
  • reduction of commercial risks for state-supported banks;
  • and enhanced support services for microlenders.

Through these actions, the World Bank was able to expand the number of deposit and loan accounts in a four-year period by 68 percent.

By developing more stable forms of credit, these programs have created a more stable Nicaragua. For a small farmer with little to his or her name, credit access, even in microcredit form, allows for more stability and more consistency. Through credit access, Nicaragua will gradually diminish its poverty.

– Nick McGuire

Photo: Flickr

Poverty in Mexico

Poverty in Mexico, and crime as a result of that poverty, are well-known problems. In Mexico, there is a rising level of violence as well as stagnant wages and declining purchasing power.

In 2014, 53.2 percent of the country lived below the national poverty line by the broadest measure of poverty. This means they lack sufficient income to meet basic needs including food, health, education, clothes, housing, transport and more.

On average, Mexican laborers worked a total of 2,246 hours in 2015, the most of the 35 members countries of the Organization for Economic Co-operation and Development (OECD). However, those workers earned on average a total of only $14,867, the lowest in the OECD.

According to the U.S. Agency for International Development (USAID), Mexico received $338 million in aid that was broadly classified as economic development and military assistance in 2015.

The amount of foreign aid to Mexico varies each year but it has been about 0.7 percent of overall U.S. foreign aid since 2010. Overall foreign aid represents about 1 percent of the federal budget.

There are several initiatives that address poverty and seek to help those living in poverty in Mexico. Three organizations running initiatives like these are:

  1. Freedom from Hunger
  2. Un Techo para mi País (TECHO)
  3. Economic Commission for Latin America and the Caribbean (ECLAC)

Freedom from Hunger

Freedom from Hunger uses microfinance as a self-assist support tool to help the poor reduce the day-to-day uncertainties of cash management. It also promotes the delivery of integrated financial services to increase economic and food security of the poor in Mexico and Central America, especially for women and girls.

Freedom from Hunger also developed and promoted “value-added” or “integrated” microfinance programs that pair financial services with education and health protection.

The education programs engage women during microfinance meetings with practical skills to promote better health, nutrition, business and money management through the use of dialogue, story, song, demonstrations and pictures.

The organization has six specially designed e-learning courses to build the skills of microfinance institutions and to create a frontline group who can provide better financial training to their clients.

TECHO

TECHO is a youth led non-profit organization present in Latin America and the Caribbean. They seek to overcome poverty in slums through the collaborative work of youth volunteers with families living in extreme poverty in Mexico.

TECHO aims to have society as a whole recognize poverty as a priority and actively work toward overcoming it, doing so through three strategic objectives:

  1. The promotion of community development in slums to drive thousands of families to generate solutions to their own problems. 
  2. Social awareness and action, with emphasis on having committed volunteers and involving different social entities.
  3. Political advocacy that promotes structural changes to decrease poverty. 

ECLAC

ECLAC, also known in Spanish as CEPAL, is a U.N. regional commission encouraging economic cooperation. It works toward economic, social and sustainable development in Latin America and the Caribbean. It also reinforces economic ties to other countries and nations around the world.

With efforts toward eliminating poverty in Mexico, there can be a pathway toward a stronger, flourishing country.

– Julia Lee

Photo: Flickr

credit access in South Africa
In order to have a stable and profitable economy, a country must rely on instilling credit options for its citizens. This comes with some downfalls, such as the ability to spend more than one earns, and can lead to debt.
Credit access in South Africa became a struggle for its citizens, and in 2001, about 57 percent of the country lived below the poverty line. More often than not, it’s poor people that lack credit for loans and other ways to get funds.

 

Accessing Financial Services

During apartheid, many South Africans were denied access to simple financial services like being able to establish credit. Whether caused by social barriers or policies, the people living in the country strived for change once the divisive political system came to an end.

South Africans were able to pass the National Credit Act in 2005, an act that allows for the promotion and advancement of “the social and economic welfare of South Africans, and also promotes a fair and transparent credit market and industry to protect consumers,”  according to the Banking Association of South Africa. 

 

A Decade of Results

In the decade after the law was passed, there has been a significant increase in job retention, income and even the quality of food being grown and purchased. South Africans’ lives were affected in positive ways as a direct result of having a credit score. Credit access in South Africa also helped people feel that they still had ways to support their families, even during times of job insecurity.

 

Lulalend

Lulalend is a South African based lending company that aims to help small businesses reach their potential growth levels and caters to what they call small and medium enterprises (SMEs). Founded in 2014, the organization aims to make a difference for businesses “too small to receive credit from traditional commercial banks, yet too large to receive credit from micro-financing businesses.”

Lulalend helped with credit access in South Africa in a major way because the application and review process is so quick. However, it has come with some drawbacks: in a 2015 World Bank report, South Africans were the world’s biggest borrowers and also managing their debt poorly.

 

A Brighter Future

As long as credit providers are willing to work with the borrowers, the economy may become stable enough to support the country without a large market crash. Efforts such as improved credit access are the crucial routes necessary to changing this region’s economic status.

– Nikki Moylan

Photo: Wikimedia Commons

credit access in BelarusFor emerging economies, ensuring as many people as possible have access to credit is an important step in promoting economic activity. Improved credit access in Belarus will encourage economic growth as more people are able to start businesses. It will also give people greater confidence in the economy and encourage them to spend more money.

The Belarus economy struggles primarily with financial inclusion. This means that although the Belarusian economy has the financial infrastructure in place to offer people financial products, many people do not take advantage of them. Surveys have indicated that this is primarily due to low levels of financial literacy in Belarus, as well as the financial system’s inability to reach people in rural areas as easily as their urban counterparts. However, some of the results have indicated that Belarusian banks just do not lend liberally enough to ensure full credit access in Belarus.

International Involvement

This is where the international community can and does step in. Belarus is a country that stands to benefit from greater access to microloans, which are often provided by international actors such as the U.S. Agency for International Development (USAID) and the European Union.

The European Investment Bank (EIB) is currently contemplating a major contribution to improving credit access in Belarus. The EIB is considering providing the equivalent of a $100 million credit line for small and medium-sized enterprises. This line of credit will be used in conjunction with loans provided by Belarusian banks. The EIB funds are to be used to provide half of the financing requested by borrowers, with the World Bank, the European Bank for Reconstruction and Development, or local banks covering the rest. The EIB loans also come with a five year grace period during which no payments are due on the principal of the loan.

Making this financing available will greatly improve credit access in Belarus for would-be business owners and will enable many more people to start their own businesses. This project is notable because it will prioritize making capital available to those wishing to use it for projects that will promote broader economic development.

Financial History

Steps are also being taken to improve financial literacy along with credit access in Belarus. USAID is working with local nonprofits who provide microloans to organize training for borrowers to ensure that they understand the terms of their loans and are able to pay them back.

Additionally, the Belarusian credit registry has recently moved to give all Belarusians access to their credit reports via the internet. Previously, this information was only available to customers of one particular bank. Now, any Belarusian is entitled to view their credit report once a year free of charge. People can view their report additional times for a nominal fee.

Giving people greater access to their credit history is a major accomplishment and has the potential to promote greater credit access in Belarus. It can encourage more people to engage with the financial system and give them a clearer picture of where they stand, enabling them to make informed decisions about their finances. With increased financial knowledge, people could potentially be encouraged to take out loans they previously would not have thought themselves eligible for. All of this, in turn, will generate more economic activity.

Belarus is an emerging market that will benefit greatly from improved credit access. Ensuring full credit access is an easy way to promote economic development and improve quality of life. Thanks to both local and international actors, Belarus is making major strides in this area.

– Michaela Downey
Photo: Flickr

credit access in CubaCuentapropistas, small and medium-sized Cuban private enterprises, do not have access to the assets they need in order to continue to prosper in Cuba. Since the initiation of President Raúl Castro, the amount of private business owners has tripled and the number of nonagricultural co-ops and individuals renting property has also continued to grow. For a continuous trajectory, credit access in Cuba for these cooperative enterprises and individuals needs investments and working capital.

There are over half a million legally registered cuentapropistas in Cuba and the numbers are still rising. These Meso, Small and Micro Enterprises (MSMEs) are an important economic asset to both Cubans and travelers, providing them with a wide variety of goods and services, creating employment and generating income.

Although microfinance lending has widened, it is still very limited. Statistics collected from the Central Bank of Cuba showed that in the wake of the government banking reform in 2011, 378,011 people received financing worth $135 million between the years 2012 and 2014. Only 34 percent of lending went to sole farmers and small enterprises, while micro enterprises accounted for about 2.6 percent. 63 percent of the loans that were lent went toward financing the construction of homes and renovating businesses.

Microcredit has been available in Cuba solely through local banks, as opposed to international banks or NGOs, which has presented a number of disadvantages to its success. Many Cubans lack a credit history, which has ruined the credibility and creditworthiness of borrowers. Another obstacle hindering credit access in Cuba is the lack of knowledge of the usage of credit among business owners primarily due to the many years of the nation’s state-owned and-operated political and economic system.

However, this has not stopped Credit4Cuba, a nonprofit foundation established in the year 2015 in the Netherlands by Marije Oosterhek and Dennis Schmidt. This organization is making a difference for cuentapropistas by supporting small and growing enterprise development in Cuba. Credit4Cuba works closely with existing groups in Cuba by providing the proper practical training and coaching assistance to entrepreneurs hoping to enter the world of cuentapropistas in order to expand their existing business.

Aside from offering training and coaching, Credit4Cuba aims to set up a social impact hub in Havana. It hopes to create a social community where entrepreneurs can meet to interchange experiences and collaborate on ideas in order to create opportunities and join efforts toward developing their businesses. In the near future, Credit4Cuba will work to connect cuentapropistas with social investors, entrepreneurs and trainers worldwide, provided that all participants will contribute toward the Sustainable Development Goals and work to create a positive influence in Cuba.

Microfinance organizations similar to Credit4Cuba, like the Grameen Bank and Kiva, are not only helping the economy for developing countries to prosper, but they are also contributing to the reduction of poverty. Credit access in Cuba for small business owners is slowly moving in the right direction.

– Zainab Adebayo

Photo: Pixabay

credit access in Malaysia
Malaysia is a rapidly growing economic country with only 0.6 percent of its population living below the poverty line. The country’s economy is largely dependent on Small to Medium Enterprises (SMEs), which comprise 36 percent of the gross domestic product (GDP) and also provide employment to 65 percent of the population.

Despite this success, however, financial institutions were reluctant in granting loans to SMEs, thereby making credit access in Malaysia difficult. The reasons behind these barriers include a lack of:

  • collateral to secure loans
  • capacity to borrow money
  • insufficient knowledge & track record of business

 

Small to Medium Enterprises

SMEs are important for Malaysia’s growth and development as these organizations represent almost 97 percent of the country’s business establishment; such enterprises therefore provide a vital source for job creations. Sometimes these small businesses start as an idea from a few people investing their own money or borrowing from friends and family.

With success, extension of businesses become inevitable and then require money to hire new people, develop new products and facilitate other business necessities. Due to this chain, the administration came up with ideas to ease the process of credit access in Malaysia.

 

Credit Guarantee Corporation

Credit Guarantee Corporation (CGC) of Malaysia with their 45 years of experience came with a wide variety of schemes for supporting SMEs. Some of them are Biz-Mula for Malaysian start-up companies, Biz-Wanita for women headed enterprises, Green Technology Financing Scheme (GTFS) for supporting sustainable energy and also other schemes for indigenous Malaysians.

The CGC schemes cover almost 50 to 90 percent of the risks of granting loans in exchange for a 2 to 3.5 percent fee; this coverage thus makes credit access in Malaysia accessible for many small to medium business organizations. The scheme is properly designed and verified so as to be accepted by the banks in Malaysia.

 

Benefits for Small and Medium Enterprises

Biz-Mula is a direct financing scheme for small businesses less than four years old. These schemes utilize Bank Negara Malaysia (BNM) for the funding of SMEs. With certain eligibility and restriction criteria, the financing amounts range from 30,000 to 300,000 Malaysian roubles (RM).

Biz-Wanita scheme is the same as Biz-Wala except it only funds women entrepreneurs; both Biz-Mula and Biz-Wanita work for all economic sectors, except primary agriculture and micro-enterprises.

The GTFS provides opportunity for green investments by offering a 60 percent guarantee on the financing amount and a 2 percent discount on the interest or profit rates. This scheme was accessible from both private and commercial financial institutions till December 2017; this support greatly helped in the expansion of the green technology sector.

Pembiayaan Mikro scheme provides financing for up to 50,000 RM without collateral to micro enterprises who oftentimes lack credit history. The scheme can also offer lower-rate finance through BNM’s Micro Enterprise Fund.

 

Benefits from Foreign Direct Investments

Foreign Direct Investments (FDI) in Malaysia ranged between $9 to $12 billion during the years of 2010 through 2017. According to the data gathered from the  Malaysian Investment Development Authority (MIDA), the majority of these investments stem from China, Japan, the Netherlands and the U.S. Generally, the funds originate from the service, mining, manufacturing and construction fields, and come with a promise of almost 61,930 job opportunities through 2,294 projects.

Malaysia is a country where credit access has been strategically eased for business growth through the lowering of collateral requirements, longer-term loans and lower interest rates. These changes were possible by joint initiatives from both the administration and financial institutions and hopefully will continue to be effective and helpful to the people of Malaysia.

– Mahua Mitra

Photo: Flickr

credit access in EcuadorEcuador, located on the northwest coast of South America, implemented numerous credit programs in recent years. These changes help raise credit access in Ecuador and affect women and high-poverty communities the most.

According to the U.S. Department of State, 10 tax laws were passed in Ecuador from 2006 to 2012, all working to help credit accessibility and the economy. An estimated 5,000 new jobs will be created in 2015 to 2019 from finance programs.

 

The Programs

The National Program for Finance, Entrepreneurship and Economic Solidarity (PNFPEES), established in 2009, works to help people in high-poverty areas gain credit access in Ecuador by providing loans. The Inter-American Development Bank (IDB) loaned $50 million to help employment opportunities grow and to expand microcredit, mainly for women with low income. IDB is also working to increase credit access in poverty-ridden areas of Ecuador by 60 percent.

World Council of Credit Unions, Inc. (WOCCU) works to help extend credit to those who are poor or low-income clients. WOCCU established three programs to help grow access to credit:

  1. The Cooperative Strengthening Program
  2. The Rural Savings and Credit with Education (CREER) Program
  3. The Savings and Credit with Education (SCWE) Program

WOCCU and the U.S. Agency for International Development (USAID) built the three programs on past designs and determined the best way to further credit access in Ecuador.

CREER has been one of the most effective programs for an increase in credit access in Ecuador. According to WOCCU, CREER uses five 16- to 24-week cycles of loans. The first loan starts at $200 and can then be increased in $100 increments up to $600 if they are paid off by the end of the cycles. Furthermore, this program is involved with four different credit unions, helping people to reach an all-time high of self-sufficiency at 168 percent.

 

How the Programs Help Women

According to WOCCU, 48 percent of the clients of these programs are women, with more than 200,000 registered accounts. The SCWE program works to help women who are capable of working with microenterprise but do not have the necessary assets to be successful.

In the villages, credit unions work with 20 to 25 members who want access to credit and loans. Part of the CREER program from WOCCU found that the women requested — and demonstrated the ability to pay off — higher loan amounts than the standard $60 to $300. The credit unions noticed the women’s potential and raised the loan amounts. Many of these women and other persons in low-income areas had an option to graduate from the credit unions, which allowed them access to loans of anywhere from $1,000 to $2,000.

The mix of these programs from USAID and other organizations have worked successfully to expand credit access in Ecuador for not only women but also people who live in low-income areas. All of these programs give people a chance to have credit and take out loans that they might not otherwise have access to.

– Amber Duffus

Photo: Flickr

Credit Access in MyanmarThere is a great need to expand Myanmar’s financial sector. Seventy percent of the country’s adults have no formal access to credit, insurance or other financial services. This leaves many of Myanmar’s citizens reliant on unregulated providers with higher costs or family and friends. However, efforts are being made to improve credit access in Myanmar.

Myanmar had credit cards more up until the country’s banking crisis in 2003. As one of the 21 banks that are Myanmar Payment Union members, Kanbawza Bank announced in May 2015 that it will be Myanmar’s first domestic bank to offer credit cards once again. “We have to manage the services within limits, and that will probably not meet the customers’ wants in the initial stage,” says U Mya Than, Myanmar Payment Union’s chairman.

Another concern is that only a few Myanmar shop owners know how to use point-of-sale machines and will often reject credit cards as a method of payment. Many Myanmar shops accept cash only, a mindset that U Mya Than believes needs to change. “People need to get used to not carrying cash and instead putting money onto their cards. Their habits may change if they can get credit,” he says.

Co-operative Bank Ltd. (CB Bank) plans to issue only secure credit cards in its first stage of helping to improve Myanmar’s credit access. CB Bank also proposed policies and procedures for its credit card program to the Central Bank of Myanmar (CBM). The policies require the bank customer to have the same amount of money on their credit card as they do in their deposit account. CB Bank managing director U Pe Myint says the program will begin once the CBM approves it.

In October 2015, Myanmar’s government announced a goal for 40 percent of the country’s people to have financial services access by 2020 and for 15 percent to use more than one financial services product. The government believes that mobile phones coupled with agent cash-in and cash-out services can accelerate Myanmar’s development toward this goal. Myanmar was also reported to be the third fastest-growing mobile market in the world after India and China. Myanmar’s government is working to ensure that the right business models are put in place to allow mobile operators and subsidiaries to provide financial services.

In December 2016, the World Bank’s board of executive directors approved a $100 million credit to support Myanmar in improving access to financial services for families and small and medium-sized businesses. Myanmar’s Financial Sector Development Project aims to promote the development of a stable financial sector, including reforms to increase the provision of banking services, improved credit access in Myanmar and other financial products across the country.

“Improved access to credit will mean higher incomes and more jobs,” says Ulrich Zachau, the World Bank country director for Southeast Asia. The credit will come from the International Development Association, including credit terms for a maturity of 38 years, a six-year grace period and a 0 percent interest rate. Myanmar’s farmers, small businesses and low-income households will also benefit.

In May 2017, the International Finance Corporation (IFC) successfully supported the CBM in developing a regulation for credit reporting. The CBM also issued a regulation that provides the basis for credit reporting companies’ operations and establishment. This served as a key step toward improving credit access in Myanmar, along with helping the country’s small and medium enterprises.

“With an effective enabling environment that the enactment of this regulation brings, we hope to see the very first credit bureau come online soon,” says DawKhin Saw Oo, the CBM’s deputy governor. The IFC plans to continue supporting the CBM in strengthening its supervisory capability over credit reporting services providers. The IFC will also help the CBM educate Myanmar’s people on credit information sharing and financial consumer protection.

These efforts and others will continue to work toward making credit access in Myanmar possible. Improving the country’s financial services will play a key role in providing Myanmar’s citizens with credit access and other financial benefits. Myanmar’s growing mobile market can also help strengthen the country’s financial stability, helping more Myanmar residents have access to financial services as well.

– Rhondjé Singh Tanwar

Photo: Flickr