Jun 14, 2019

Myanmar Lowers Microloan Interest Rate Cap from 30% to 28%

The Ministry of Planning and Finance of Myanmar reportedly decreed recently that microfinance institutions (MFIs) must start charging less for loans immediately. Daw Phyu Yamin Myat, the general secretary of the 107-member Myanmar Microfinance Association, reportedly stated that a minimum of three months should have been allowed for MFIs to prepare for the change. The government cut the maximum lending rate from 30 percent to 28 percent per year. It also cut the minimum that MFIs must pay on compulsory savings from 15 percent to 14 percent per year. The minimum rate on voluntary savings remains unchanged at 10 percent. Daw Seinn Nwe Oo, the head of finance at the Myanmar-based microlender Proximity Finance, reportedly said that the drop in income for will be troublesome for some rural lenders, which tend to have higher expenses than urban lenders. As of 2019, there are 181 licensed MFIs in the country, of which 110 are domestic companies, 47 are foreign companies, 19 are NGOs and five are partnerships. By the MicroCapital team Sources and Additional Resources Myanmar Times article https://www.mmtimes.com/news/finance-ministry-cuts-microfinance-loan-interest-rates.html Myanmar Ministry of Planning and Finance https://www.mopf.gov.mm Myanmar Microfinance Association https://www.myanmarmfa.com Proximity Finance https://proximitydesigns.org/service/farm-finance/ Did you know that MicroCapital publishes the MicroCapital Monitor newspaper each month? Find out more at http://www.microcapital.org/products-page/.