MICROCAPITAL STORY: Microfinance Institution MBEG (Myanmar Business Executive Group) to Support Burmese Cyclone Victims with $45k in Microloans

The Myanmar Business Executive Group (MBEG), a nonprofit organization operating in Myanmar, has announced a plan to assist victims of Cyclone Nargis that struck Myanmaar in May 2008. The organization’s management said MBEG would provide small loans to cyclone victims so they can rebuild houses and restart businesses. MBEG plans to offer loans between MMK 50,000 (USD 42) and MMK 200,000 (USD 167) in size, depending on how badly the client was affected by the cyclone. Loans will have a six-month term, and will incur a fee of 1 percent per month. Borrowers will be granted loans on the strength of recommendations from five other individuals. Collateral is not required. MBEG has budgeted MMK 50 million (USD 45 thousand) for the project.

Headquartered in Rangoon, MBEG is a non-governmental organization (NGO) operating within Myanmar. It was founded in late 2007 by private individuals, all of whom were graduates of the business school Rangoon Institute of Economics. MBEG does not disclose financial data to MIX Market, the microfinance information clearinghouse, and does not publish a website containing financial information.

Myanmar is a country in which microlending appears to be conducted mainly by NGOs and state-owned banks. There is little evidence of extensive lending by large commercial microlenders, likely due to the unfavorable political environment stemming from the country’s military dictatorship. Microlenders with a large outreach include international NGOs PACT, GRET (Groupe de Recherche et d’Echanges Technologiques), and Grammeen Trust . All operate in Myanmar under the auspices (p.2) of the United Nations Development Programme.

Cyclone Nargis was a tropical cyclone that caused the worst natural disaster in the history of Myanmar. The cyclone made landfall on May 2, 2008, causing USD 10 billion in damages and 80,000 fatalities. The United Nations estimated in its report that 1.5 million people were “severely affected” by the cyclone.

By Ryan Benson, Research Assistant

Additional Resources:

International Society for Third-Sector Research: The role microfinance NGOs in a military governed country: A case study in Myanmar. Hirohisa Yukawa.

The Irrawaddy: Farmers, Cyclone Victims Offered Microcredit, by Min Lwin, July 1, 2008.

The Advertiser: Burmese military says 80,000 killed by cyclone, May 8, 2008.

National Coalition Government of the Union of Burma: U.N. Leader Sees Myanmar Cyclone Devastation, May 22, 2008.

PACT: Home

GRET: Home

Grameen Trust: Home