The Netherlands Development Finance Company, a public-private partnership also known by its Dutch acronym FMO, recently disbursed a five-year loan of USD 15 million to Pact Global Microfinance Fund (PGMF), a microfinance institution in Myanmar. The goal is to support microenterprises facing escalating income inequality due to the COVID-19 pandemic. The organization’s “commitment to invest in business with women ownership and [its] ability to reach remote areas of the country are an important contribution to reducing inequalities in Myanmar,” stated FMO Chief Investment Officer Linda Broekhuizen.
PGMF was founded to continue the microfinance operations that the US-based NGO Pact began in Myanmar in 1997. The institution acquired its operational license in 2012 and remains a wholly owned subsidiary of Pact. Pact is an NGO that was established in 1971. As of 2020, it operates in 38 developing countries, working to achieve social, economic and environmental goals.
PGMF provides microloans and business training to borrowers, approximately 98 percent of whom are women. During 2018, the organization issued 1.3 million loans totaling USD 409 million. It holds a loan portfolio of USD 368 million as of 2020.
Established in 1970, FMO is 51-percent held by the Dutch government and 49-percent by private sector institutions. The institution works toward the UN’s Sustainable Development Goals by funding capacity development as well as placing debt and equity investments in sectors such as agribusiness, financial institutions and energy. During the six months ending June 2020, FMO lost EUR 280 million (USD 330 million) on a total portfolio of EUR 12.7 billion (USD 14.9 billion).
By Romil Pandey, Research Associate
Sources and Additional Resources
PGMF webpage
https://www.pactworld.org/country/pact-global-microfinance-fund
Pact webpage
https://www.pactworld.org/
PGMF 2018 fact sheet
https://www.pactworld.org/PGMF
Pact 2019 financial statement
https://www.pactworld.org/sites/default/files/PACT%2C%20Inc.%20and%20Affiliates_19%20FS%20FINAL.pdf
FMO June 2020 interim report
https://annualreport.fmo.nl/2019/interim-report-2020/at-a-glance/
Past MicroCapital news on FMO
https://www.microcapital.org/microcapital-brief-maha-agriculture-borrows-6m-from-fmo-for-digital-microfinance-in-myanmar/
Past MicroCapital news on PGMF
https://www.microcapital.org/microcapital-brief-united-nations-development-program-undp-transfers-microfinance-portfolio-in-myanmar-to-pact-global-microfinance-fund/
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