MICROCAPITAL BRIEF: Myanmar Caps Microloan Interest Rates at 17%, Germany’s Savings Bank Foundation for International Cooperation (SBFIC), Philippine’s CARD Fund Mingalar Myanmar, Myanmar Egress Microfinance Projects

Sparkassenstiftung fuer internationale Kooperation (Savings Bank Foundation for International Cooperation, SBFIC), a development organization that finances microfinance institutions (MFIs), and the Centre for Agriculture and Rural Development (CARD), an MFI in the Philippines, recently signed deals to begin microfinance projects with Mingalar Myanmar and Myanmar Egress, two NGOs in Myanmar. The deals were made possible by the recent approval of the Myanmar Microfinance Bill, which allows more types of institutions to provide microloans. The bill also establishes a structure to which all MFIs in Myanmar must adhere and sets an interest rate ceiling at 17 percent per year.

Of the deal, Joerg Teumer, SBFIC’s representative for Vietnam and Myanmar, reportedly said, “The aim is to bring the knowledge of the German saving bank to other countries to give financial services to the broader population…. Both organizations are now in the process of hiring and training staff and preparing organizational conditions. We want both organizations to be deposit-taking microfinance institutions [that will be] like small banks for simple people.” The institutions will initially be confined to operating in 10 townships in the Yangon Region.

The German government is providing EUR 200,000 (USD 250,000) for the project. The project is set to begin in December 2013 after the necessary licenses have been procured.  All profits will go towards the expansion of the project to other areas of Myanmar.

Mingalar Myanmar and Myanmar Egress are NGOs whose mission is to support economic development and build political stability. Myanmar Egress’s main function is to properly train young people for careers in government. Mingalar Myanmar mainly works to implement sustainable development projects throughout the country. Financial information is not available on either of these NGOs.

According to the US-based nonprofit Microfinance Information Exchange (MIX), as of December 31, 2010, SBFIC has total assets of EUR 1.1 trillion (USD 1.3 trillion) and outstanding loans of EUR 660 billion (USD 802 billion). CARD, which was established in 1986, has outstanding loans of USD 76.8 million and total assets of USD 103.1 million as of December 31, 2011, according to MIX.

By Jaime Fellers, Research Associate

About Sparkassenstiftung fuer internationale Kooperation (Savings Bank Foundation for International Cooperation, SBFIC):

Sparkassenstiftung fuer internationale Kooperation (Savings Bank Foundation for International Corporation, SBFIC) was launched in 1992 by Germany’s Sparkassen-Finanzgruppe, a group of savings banks. SBFIC focuses on five project types: development of retail banks, credit lines for small and medium-sized enterprises, transforming NGOs into formal banks, human resource development and financial-sector development. According to the US-based nonprofit Microfinance Information Exchange (MIX), SBFIC has total assets of EUR 1.1 trillion (USD 1.3 trillion) and outstanding loans of EUR 660 billion (USD 802 billion) as of December 31, 2010.  More recent financial information is not available.

About Centre for Agriculture and Rural Development (CARD):

The Center for Agricultural and Rural Development (CARD) NGO is a microfinance institution (MFI) based in the Philippines. It was established in 1986 and is part of the CARD group of mutually reinforcing institutions, which includes CARD Rural Bank, CARD Development Bank, CARD NGO Microfinance, CARD Training Center, CARD Development Institute, CARD Mutual Benefit Association and CARD Insurance Company. CARD NGO offers loans, savings, training and consulting. As of December 31, 2011 CARD has outstanding loans of USD 76.8 million and total assets of USD 103.1 million, according to the US-based nonprofit Microfinance Information Exchange (MIX).

Sources and Additional Resources:

The Myanmar Times: “Loan Network to get Boost”, by Juliet Shwe Gaung, July 2-8, 2012, http://www.mmtimes.com/2012/news/633/news63309.html

MicroCapital.org article: “MICROCAPITAL BRIEF: Dr Hans Dieter Seibel Calls for Liberalisation of Myanmar’s (Burma’s) Financial Sector; UK’s Department for International Development Commits $15m to Support Rural Microfinance” by Kristha Abores, January 14, 2012, https://www.microcapital.org/microcapital-brief-dr-hans-dieter-seibel-calls-for-liberalisation-of-myanmars-burmas-financial-sector-uks-department-for-international-development-commits-15m-to-suppor/

MicroCapital.org article: “MICROCAPITAL BRIEF: Myanmar (Burma) to Spend $333k to Establish Microfinance Programs in Rural Townships” by Cameron Milani, November 17, 2011, https://www.microcapital.org/microcapital-brief-myanmar-burma-to-spend-333k-to-establish-microfinance-programs-in-rural-townships/

MicroCapital Universe Profile: Sparkassenstiftung fuer internationale Kooperation (Savings Bank Foundation for International Cooperation, SBFIC) https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Sparkassenstiftung+fuer+internationale+Kooperation+%28Savings+Bank+Foundation+for+International+Corporation,+SBFIC%29

MicroCapital Universe Profile: Centre for Agriculture and Rural Development (CARD) https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Center+for+Agricultural+and+Rural+Development+%28CARD%29+Non-Governmental+Organization+%28NGO%29

Browse the MicroCapital Universe and add your entry to the wiki at https://www.microcapital.org/microfinanceuniverse/

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