Yangon, Myanmar, June 12, 2018—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. Micro lenders, therefore, need to urgently
strengthen their capacity in governance, risk management, and responsible
financing for a sustainable and responsible commercial microfinance sector.
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.
IFC—a sister organization of the World Bank and member of the World Bank
Group—is the largest global development institution focused on the private
sector in emerging markets. We work with more than 2,000 businesses worldwide,
using our capital, expertise, and influence to create markets and opportunities
in the toughest areas of the world. In FY17, we delivered a record $19.3
billion in long-term financing for developing countries, leveraging the
power of the private sector to help end poverty and boost shared prosperity.
For more information, visit www.ifc.org
About the Myanmar MicroFinance Association
The Myanmar MicroFinance Association (MMFA) was incepted in 2013 by the
encouragement of the Financial Regulatory Department (FRD) of the Ministry
of Finance and Planning. All licensed microfinance organizations are entitled
as members to participate in this association. MMFA is run by a group of
capable Central Executive Committee members and their management team.
MMFA organizes members’ meetings, working group meetings, and partners
with local and international development partners for capacity building
training, seminars and conferences, and policy advocacies for the development
of MFIs and the microfinance sector as a whole. It prepared the First Microfinance
Policy White Paper that reflected the voices of its members in 2016 and
has been collaborating with FRD in microfinance policy, rule and regulation
making. MMFA obtained its permanent license from the Ministry of Home Affairs
in March 2017.
About the Myanmar Institute of Directors
The Myanmar Institute of Directors (MIoD) is an independent organization
promoting corporate governance standards and best practices in Myanmar.
It aims to advance board professionalism, promote business ethics and transparency,
create networks between corporate leaders and stakeholders, and boost investor
confidence in Myanmar’s capital markets. The institute’s activities include
providing board and corporate governance training, helping raise awareness
on governance topics, and advocating for market reforms. MIoD was formed
with support from the International Finance Corporation (IFC), a sister
organization of the World Bank and a member of the World Bank Group, and
the governments of Australia and the United Kingdom. For more information,