UN Capital Development Fund

Key Learnings, Challenges, and Directions

MicroLead Workshop
Neal Youngquist
29 November 2016

Learnings (Opening Remarks)

FRD
Significant regulatory advancements since 2011
Supervisory Capacity
Regulations
Additional regulatory advancements will continue to encourage a
savings enabled context
LIFT
Mobilizing savings is not a myth
Savings potential growth can be 10 to 20
times
Need to keep in mind the full range of value
chain actors and the private sector
Importance of indirect interventions to
directly affecting the poor

Learnings (Opening Remarks)

UNCDF
Globally and in Myanmar savings is
the most preferred and important
financial tool for women to build
household equity

Yet, access to formal savings is

constrained

Learnings
ASA
Myanmar is a favorable environment for microfinance
High demand for long term savings and deposits for education in Yangon
Objective to grow by over 290,000 clients with 15M savings balance and
75M loan portfolio over next 5 years through savings led services
Savings deposits could grow by 50% of gross loan portfolio is regulations
liberalized

ACCU
Grassroots people can save regularly in small
amounts
Significant potential for meaningful participation in
savings and credit cooperatives
Child savings account at the school/community level
36,000 Cooperatives in Myanmar, 2.6M members
Business and social responsibility mindset

Learnings (Alliance)
Saving habits of rural and urban target groups in
Mandalay, Madaya and Pyin Oo Lwin

Urban

12%

Rural

16%

0%

20%
in kind

rosca

46%

8%

38%

16%

40%
gold

14% 4% 7%

12% 3%
2% 15%

60%
cash

bank

11%

80%
land

not saving

100%

Learnings (Alliance)

Design of Term and Demand Savings Products

- Flexible Interest Rates

Design and Delivery of a Client Financial

Education Model

Challenges (ASA)

Developing Effective Prudential Regulatory Capacity

Regulatory Constraints
Deposit Rate Caps
Staff Hiring and Retention
Positions?
Clients Not Able to Fully Benefit From Formal Savings

Challenges ACCU

Low population density

Lack of trust in leadership
Negative view of cooperatives
Competition
No regulatory back up to ensure the prudent
management of SCCs
The microfinance model ignores the crucial importance
of solidarity and local community ownership and control
The microfinance model is pre -programmed to
precipitate a sub-prime-style over-supply
Patience and capital infusion

Challenges (UNCDF)
Market Sector
Deepen Supervisory Capacity
Deepen Market Understanding
Engaging and Equipping Financial Service
Providers
Raise Awareness and Action
Partners
Developing a Viable Business Case
Staff Motivation and Adaption
Fintech Adoption
Client Adoption
Collaboration with Regulatory Levels

Reflection
Specific Interventions to Advance the Savings
Context?

Building and Maintaining Trust

- Savings is Built on a Foundation of Trust

It takes 20 years to build a reputation and five

minutes to ruin it. If you think about that, you'll do
things differently."

Warren Buffet

Reflection and Discussion

What is the measure of trust that clients have in financial
institutions?
Low?

High?

Wait and See?

How can this be increased?

What are the threats to eroding or destroying financial

institution trust ?

Reflection
Specific Interventions to Advance the Savings
Context?

Dual Capacity Building Tracks:

Supervisory Level
Financial Service Provider Level

Reflection

High Prudential Regulations are Established Until a Strong

Supervisory Framework Develops

How Can the Industry Contribute to Self Monitoring

Deposit Taking Institutions and Capacity Building?

Reflection
Product Development, Distribution, and Client
Behavior
What Measures are Effective in Forming Client
Savings Habit?

How May Savings Products be Targeted to Meet

Client Segment Needs?
What is the Value Add for Financial Education?

Directions
Where do we go from here?

Institutional Level?

Industry Level?

Supervisory Level?

UN Capital Development Fund

THANK YOU