Sherpa Hossainy's Blog

Pact Myanmar eyes $100m loan portfolio by 2016

Posted in Business, Microfinance, Myanmar, Yangon by Sherpa Hossainy on July 9, 2013

Published in Myanmar Business Today (Vol 1, Issue 7) on March 7, 2013

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Pact Myanmar, the largest microfinance service provider in the country, plans to expand its outreach in Myanmar by growing its portfolio and spreading into new townships, Pact Global Microfinance Fund (PGMF) Chief Operating Officer Fahmid Bhuiya said.

During the last two months, the Washignton-based microcredit lender expanded its operation in the Delta and Yangon region, opening six new branches in Kwan Chan Kone, Kaw Hmu and Twante township in Yangon and Pathein, Myaung Mya and Kan Gyi Daung township in the Delta region.

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A woman receives microfinance loan at a newly opened branch of PGMF in Kaw Hmu Township, the constituency of Daw Aung San Suu Kyi, in Yangon, Myanmar. Fahmid Bhuiya/PGMF

“The government has prioritised microfinance as a key part of its poverty alleviation programme and rural development. Pact is implementing about 80 percent of the country’s microfinance programme and we want to use our expertise and experience of implementing microfinance programme in Myanmar by expanding to new townships and new geographic locations,” Fahmid told Myanmar Business Today.

“Currently, we manage almost $70-million loan portfolio from donors like UNDP. As part of our expansion plan we are aiming to add another $25-30 million in the next three years, and reach a $100-million loan portfolio by 2016,” he explained.

Pact currently serves approximately 500,000 households, reaching 2.5 million beneficiaries in Yangon, Ayeyarwady, Magway, Sagaing, Madalay and Shan regions. Pact was allowed to expand its service into 26 new townships, besides its previous 25, under its microfinance licence, following the enactment of the microfinance law in 2011.

PGMF wants to expand to eight more townships in the next two months – Nat Mauk, Pwint Phyu, Yae Sagyo and Myaing in Magway region, and De Daye, In Gapu, Kyait Latt and La Myanthnar in the Delta region.

The new branches will have a total outreach of about 50,000 households, serving half a million beneficiaries, the lender said.

“All the regional governments in Yangon and Delta are giving us their full and welcoming support for expansion. We are gradually raising funds for loan capitals to expand to new areas, while currently we are supported by UKAID, USAID and LIFT,” the PGMF chief operating officer said.

“We are eyeing to serve 10 percent of the demand in three years. For only one NGO that is huge,” Fahmid said. A study of International Finance Corporation (IFC), a member of the World Bank Group, in January estimated Myanmar’s microfinance demand at $1billion.

“The government, donors and sponsors should promote more microfinance institutions like Pact to meet the demand. Some international NGOs have already expressed their interest and processing entry requirements,” he added.

“We don’t want to be selfish. We want to be open and we want more actors to come to the country so that clients can get more services.”

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