UN Capital Development Fund

ALLIANCE for MICROFINANCE in MYANMAR

Our approach to FINANCIAL EDUCATION

2016

Introduction

Households
served

Outstanding
Loan amount

Average loan
amount

30,821

$
4,093,997

$ 205

History
Based on a partnership between BASIX and FIDES,
supported by Microlead
Set up with a social mission to deliver demand-oriented
financial services and financial education to women
entrepreneurs
Start of Operations in November 2014 with receipt of
deposit-taking MFI license, headquartered in Mandalay
Start with Group Lending product; introduction of
Individual Lending in December 2015
Implementation of Financial Education Q1 2016
Expansion in rural areas outside Mandalay city Q2 2016

Branch network

Madaya

Pyin Oo
Lwin
Patheingy
i

Mandala
y
Amarapura
Sintgaing

Ohn
Chaw

Research focus
Focus on research to enable
demand driven product and process
design
Micro-insurance research:
feasibility and demand for
insurance products
Study on demand for farmers
Study on urban value chains
Client satisfaction, outcome and
competitive bench-marking
research
Market research for new branch
development

Results

Indicator
Gross Loan Portfolio (USD)
Clients Outreach
Rural clients (%)
Women clients (%)
Townships served
Total Staff
Total branches

Nov 2016
4,093,997
30,821
38%
88%
11
221
7

Challenges

Weak infrastructure limits expansion into rural areas

Human Resource constraint slows down expansion
Funding constraints reduces potential growth
Lack of a credit bureau and rapidly rising competition
Regulatory constraints

Our approach to Financial Education

Financial Education
Approach
- FE positions created
- Assess demand and needs for financial education
- Analyze touch points and design FE methods and
messages
- For Group clients: FE incorporated in lending process
- For Individual clients: FE as extra service offered to
client

Demand research
Life story Research
- In-depth interviews to understand
client asset building strategies,
vulnerabilities, use of financial
tools and overall financial
knowledge
- Identified characteristics of client
demand for financial services to
inform product development
- Identified knowledge gaps and
best delivery channels for
financial education initiatives

Demand research
FE incorporated into ongoing Research
- ALLIANCE incorporates FE measures into research on
new branch locations, new products, client satisfaction
and competition
- The institution receives regular feedback on financial
literacy of clients and overall FE needs
- Information is specific to location and product target
segment, allowing for better tailoring of FE offering

Presentation Guide
Presentation materials to standardize
meeting process, enhance
communication and add financial
education messages
Presentation guides and presentation
scripts printed and used in community
as part of loan process
Presentations make use of strong
visuals and a story telling approach

Disbursement Video

New approach to disbursements to be piloted in

December
15-minute video used to explain product and contract
features, deliver financial education messages
Live-action story telling used to engage customers
Video followed by confirmation questions and
discussion with staff member then disbursement of loan

Other touch points for FE

Location
meeting

Group
formation

Supervisor
Appraisal

Disbursement
Process

Location Meeting: Introduce Alliance, their products and

services. FE messages: Self-assessment of loan capacity:
what factors to take into account when considering taking a
loan; Risks of over-indebtedness; Risks of dealing with brokers
and rules to limit employee fraud.
Group formation: Presentation Guide

Supervisor Appraisal: Supervisor meets the group and

proceeds to reinforce messages on: The importance of group
solidarity; The importance of saving; Strategies for planning
and saving.

Disbursement: Disbursement Video

Financial Education Training

The Financial Education program for individual lending
clients is designed to fill in the financial knowledge gaps
of the clients receiving financial services from Alliance
The program for SE clients is structured as a club
The program includes fundamental business courses
such as:
Cash management
Debt management
Savings and Investments
Record keeping
Business analysis and planning
Marketing

Savings approach

Approach
Research on savings behavior and needs
Develop customer oriented savings products
Raise awareness through marketing and financial
education
Develop processes and train staff
Market new savings products
Build trust among clients

Benefits of savings
For Customer:
Keep
money safe

Accumulate
lump sums

Earn
Interest

For MFI:
Expand
services

Increase
Loyalty

Funding &
Liquidity

Results from savings research

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%

14% 4% 7% 11%

38%

16%

12% 3%
2% 15%

40%
gold cash

60%
bank land

80%
not saving

100%

Savings methods
PURPOSE

METHODS

SHORT-TERM
(few weeks to
month)

Cover expenses, manage cash Home savings: cash,

one
flow
piggy bank

MEDIUM-TERM
(few months to
year)

one

LONG-TERM
(over one year)

Emergencies
Regular education expenses
Festival celebrations
Assets purchase

Asset accumulation
Business expansion and larger
investments
Education and pension funds

Piggy bank
ROSCAs
Gold

Gold
Bank accounts
Investing in business
Investing in land or real
estate

Demand for savings

Product preferences
Savings passbook

37%

Savings plan

49%

30%

Term deposit 1%

0%

51%

29%

10%

10%

11%

20%

20%

30%

very interested

40%

interested

15%

8%

48%

50%

moderate

60%

70%

not interested

80%

90%

100%

Savings constraints
Present saving constraints:
Saving limited to informal mechanisms with limited
benefits
Prevent clients from earning interest, store cash safely
and accumulate lump sums
Reduces refinancing potential and growth for MFI

Despite:
Strong demand for savings products
Strong internal capacity for savings and financial
education
Strong liquidity position to secure public deposits

UNCDFs role
UNCDF is an important partner to ALLIANCE
UNCDF in a unique role to promote MFI sector and
financial inclusion:
Shape microfinance policy
Advice and mediator for MFI regulation
Support knowledge and exchange between investors,
MFIs, and policy makers
Support development of financial infrastructure: Credit
bureau, MF Association, new technology,

UN Capital Development Fund

THANK YOU