Founded in 1972 in Bangladesh, BRAC currently works in over 11 countries worldwide to create opportunities for millions of people living in poverty. BRAC in Myanmar was established in 2013 to provide microfinance services to communities who have been left out of the formal financial system, reaching over 47,000 female borrowers to date.
BRAC applied for a matching grant from the UNCDF Shaping Inclusive Finance Transformations (SHIFT) in ASEAN programme under the ‘Fostering Innovative Business Models for Women’s Financial Inclusion’ Challenge Fund window in April 2016 to fund the financial diaries research in Myanmar.
After a competitive deliberation process, the project was approved by SHIFT ASEAN’s Investment Committee and was initiated in July 2017 with a committed investment of of US$93,000 from BRAC and 165,000 from L-IFT matched with a US$200,000 grant from UNCDF.
Throughout the entire process from product development to implementation, BRAC and L-IFT continuously strengthened their research methodology and succeeded in graduating BRAC’s most entrepreneurial clients from group to individual loans.
The diaries approach is one where researchers made bi-weekly visits to selected respondents to ask questions about their financial lives. L-IFT and BRAC did the diaries research with 800 women, in which 80 percent were existing group loan clients of BRAC and 20 percent of Myanmar Finance International Limited (MFIL). Interviews took place in four different geographical areas spanning urban, peri-urban and rural areas. Two-thirds of the questionnaire focused on income, expenditure, loans and savings transactions of the past two weeks, while the remaining third touched on different topics like health during different interview cycles.
This approach aimed to gain deeper insight into how the interviewees accessed or used financial services and managed their money. The frequent and longitudinal nature of the diaries research also helped to capture the use of various formal and informal financial tools and the complex trends over time.
Stories from the field: Meet Daw Yee Mon
Daw Yee Mon is a 54-year-old micro entrepreneur running a small garment facility. She is also one of the respondents under the financial diaries research as is Daw Sabel who was mentioned in the beginning of the case study
Daw Yee Mon's business sews hoods for a Korean garment factory located in Shwe Pyi Thar, earning a profit of seven to eight lakhs (US$ 483 to 553) per month. Since most of the raw materials are provided by the main factory, her largest expenditure is on the wages of her 15 employees, in which 12 work full-time.
Her first four years with BRAC was as a group loan member. In the last two years, she became a client of the WME loan. Daw Yee Mon expressed her satisfaction on the product.
I like the BRAC loan. It is convenient and I have no problems repaying my monthly installments.
She used the loan to invest in other entrepreneurial endeavors within her household to improve their economic livelihood. The loan has been used for her son’s grocery store and to maintain another property that she owns and rents out.
Stories from the field: Meet Daw Hnin Yu Htwe
Unlike the others, Daw Hnin Yu Htwe is relatively new to BRAC. The WME loan she took nine months ago is her very first loan. For the past 13 years, income from her small grocery store has been enough to support her 13-year-old daughter and she did not need a loan. However, with aspirations to grow her business, she decided to take an MMK 1.2 million (US$ 832) loan from BRAC.
I WANT TO EXPAND MY BUSINESS WHILE I AM STILL YOUNG. SO, WHEN MY FRIENDS TOLD ME ABOUT BRAC, I DECIDED TO APPLY FOR A LOAN.
With this, she now purchases rice, oil, prepaid mobile cards and other supplies in bulk directly from factories instead of from wholesalers. This has lowered her unit cost and increased her profits, which are being saved for a bigger shop in future.
Created with an image by roman raizen - "sunrise at bagan"