The Microfinance Working Group is an informal network of microfinance institutions in Myanmar who regularly meet every two months to share updates and discuss issues affecting the industry. The first meeting for 2015 was hosted by BRAC Myanmar in their Yangon office. Among the challenges discussed during the meeting are the following:
- Most of the MFIs are not yet ready for the integration of mobile money in their operations. As Paul Luchtenberg of UNCDF stated, it is not an issue of the MFI saying yes or no, but a matter of when. As the telecom companies and the Myanmar Central Bank is working on the regulatory framework, the banking and MFI sectors seemed still not ready for it.
- Access to funding is still a concern for most of the MFIs. A regulation was issued in the latter part of 2014, covering the subject of accessing funding local institutions accessing international funds and international institutions accessing local funds. Two MFIs applied to check on the process.
- Limited available local staff with skills. The manpower pool is limited, which lead to the hiring of staff from outside the country, more particularly for supervisory positions. MFIs who wanted to expand faster has to work on how to have more experienced staff to field in newly opened areas.
- Alien staff mobility. Related to the hiring of staff is the issue of permission to move around the area of operations. Alien staff has to work on its permission to stay and the permission to go around the village, the quarter, the village tract and the township. Dealing with the different local authorities have become tedious and repetitive to some and has become a major work in terms of doing paperwork and meeting with local authorities.
- Communication within the industry has become a problem as it was observed that Yangon-based institutions get updates from government agencies while those based outside of Yangon were sometimes not updated. The Working Group is looked upon to be the communication hub, but its informal nature does not allow it to maintain a secretariat. Microfinance Association, the supposed industry organization has not been active in the area of coordination.
Participants to the meeting are still comfortable meeting regularly since the Working Group provides the much needed industry updates. Among the latest updates are as follows:
- There are now more than 250 registered MFIs, with a number still waiting for their licenses;
- The cap on loan amount is now equivalent to $5,000;
- LIFT is supporting the conduct of an impact assessment of the microfinance industry.