KBZ Bank part­ners with Ac­tion Aid Myan­mar to as­sist fe­male farm­ers with fi­nan­cial as­sis­tance

KBZ Bank part­ners with Ac­tion Aid Myan­mar to as­sist fe­male farm­ers with fi­nan­cial as­sis­tance

Mizzima Business Weekly - - CONTENTS - Aung Thura

Kan­bawza Bank (KBZ Bank), the largest pri­vately-owned bank in Myan­mar, is to sup­port the im­prove­ment of the stan­dards of liv­ing for women agri­cul­tural pro­duc­ers in the cen­tral part of Myan­mar by pro­vid­ing ac­cess for fi­nanc­ing, part­ner­ing with Ac­tion Aid Myan­mar, a non-profit or­gan­i­sa­tion op­er­at­ing here since 2006.

“As the first year pilot phase, we have been in­vest­ing around MMK 100 mil­lion to 120 women farm­ers and traders in Pakokku, Mag­way re­gion, who have been un­able to ac­cess the coun­try’s fi­nan­cial sys­tem,” Soe Tin Maung Zaw, se­nior gen­eral man­ager at KBZ Bank, said.

Ac­cord­ing to the pilot phase, KBZ Bank and Ac­tion Aid Myan­mar al­lo­cated and in­vested the fi­nance to sup­port MMK one mil­lion to one and half mil­lion for each fe­male farmer with an in­ter­est rate of 13 per­cent per year, with the co­or­di­na­tion of the cen­tral bank of Myan­mar.

Se­nior gen­eral man­ager Soe Tin Maung Zaw said, “This pro­gramme started in Novem­ber 2017, and we gave fi­nan­cial as­sis­tance to the five vil­lages from Pakokku town­ship, and we al­lo­cated around MMK 18 mil­lion for each vil­lage.’’ Aung Min Naing, Ac­tion Aid Myan­mar’s pro­ject man­ager for the dry zone told Mizzima that fe­male farm­ers from five vil­lages of Pakokku town­ship will now be el­i­gi­ble to ob­tain fi­nan­cial ac­cess (loans) from KBZ Bank.

He said, “Ac­tion Aid Myan­mar has con­sis­tently been im­prov­ing the women sec­tor in Myan­mar, in which we aim to pro­mote sus­tain­able in­come through im­proved ac­cess to cap­i­tal and al­ter­na­tive liveli­hoods with a fo­cus on women’s em­pow­er­ment. Be­sides, we also have been work­ing to see more growth in Myan­mar’s agri­cul­tural in­dus­try by con­sid­er­ing women’s roles si­mul­ta­ne­ously.’’ “Ac­cord­ing to our re­search here re­lated to the dif­fi­cul­ties in the agricul-

tu­ral in­dus­try, we found that there has been high in­volve­ment with women hav­ing a lead­ing role in agro-in­dus­try be­cause most men who al­ways used to help at the land plough­ing pe­riod have to find an­other job to earn ex­tra in­come and move to other cities. So women are re­spon­si­ble for the rest of the farm­ing process un­til they sell their prod­ucts,’’ he con­tin­ued.

“We see this si­t­u­a­tion hap­pen es­pe­cially in the dry zone. Men go to other cities or neigh­bour­ing coun­tries as mi­grant work­ers,’’ he added.

This pro­ject will be pi­loted over twelve months, with Ac­tion Aid Myan­mar pro­vid­ing col­lat­eral for un­der­writ­ing the credit, and is ex­pected to help women un­lock their en­tre­pre­neur­ial po­ten­tial and to pro­vide for their fam­i­lies.

Nang Lang Kham, deputy CEO of KBZ Bank re­marked: “As Myan­mar’s largest lender, we be­lieve that our core value of im­prov­ing peo­ple’s lives through bank­ing runs through ev­ery­thing we do. By pro­vid­ing loans to fe­male small­holder farm­ers who only need to pro­vide proof of land own­er­ship un­der the pi­loted pro­ject, we aim to ex­tend fi­nan­cial prod­ucts to those who would not pre­vi­ously have had ac­cess to them.’’

Agri­cul­ture plays a vi­tal role in Myan­mar, and it ac­counts for one-third of the coun­try’s GDP and em­ploys 70 per­cent of the pop­u­la­tion.

Tra­di­tion­ally, the bank­ing and fi­nan­cial sys­tems were only ac­ces­si­ble to the coun­try’s af­flu­ent pop­u­la­tion; the ma­jor­ity of farm­ers are un­banked small­hold­ers and must en­dure pay­ing back high-in­ter­est rates of be­tween 60 to 100 per­cent to lo­cal money lenders if they want to ob­tain loans to ex­pand their busi­nesses or di­ver­sify their crops.

Zin Mar, one of the fe­male farm­ers from the dry zone liv­ing in Hle Chaung Pauk vil­lage, said: “Our vil­lage has 75 house­holds, and more than 50 peo­ple are farm­ers, and they work in the farm in­dus­try. More­over, we have fre­quently been fac­ing nat­u­ral dis­as­ters like drought and flood, and we es­pe­cially suf­fer from the flood be­cause our vil­lage is si­t­u­ated on the bank of the Aye­yarwaddy river, be­sides we could not fore­cast weather which pro­vides water to our farm.’’

“There­fore we had to lose our crops like chilli plan­ta­tion and peanut farm, and we need more in­vest­ment to re­cover these losses. So we had to bor­row money from lo­cal lenders at the high-in­ter­est rates,’’ she added.

“We def­i­nitely ex­pe­ri­enced many wor­ries when we ob­tained loans from lo­cal money lenders be­cause of the high-in­ter­est rate, and we were not able to pay back in time. Now I think we will ben­e­fit from the KBZ Bank’s fi­nan­cial as­sis­tance be­cause the bank set the time-pe­riod for pay­ing back so we can sell our prod­ucts at good prices,’’ Than­dar Oo, who ob­tained a loan from the bank, a fe­male farmer from Nyaung Pin vil­lage from Pakokku town­ship, told Mizzima.

“Ac­cess to af­ford­able fi­nance is key to poverty re­duc­tion in farm­ing liveli­hoods,” ex­plained Ac­tion Aid Myan­mar Coun­try Direc­tor Shi­hab Ud­din Ahamad.

“Our core work is poverty re­duc­tion and women’s em­pow­er­ment, so this pilot opens up op­por­tu­ni­ties for women farm­ers that they have not had pre­vi­ously,’’ he said.

The pro­ject is also key to KBZ Bank’s cor­po­rate shared value and im­pact in­vest­ment agenda.

A por­tion of the re­turn made by KBZ Bank from the loan re­pay­ments will be re-in­vested into the com­mu­nity in col­lab­o­ra­tion with the Women Agro Pro­duc­ers Net­work. The agree­ment also means: . KBZ Bank loans are dis­persed to, and re­pay­ments taken from, fe­male farm­ers that need fi­nance in Pakokku.

. Ac­tion Aid sup­ports the im­ple­men­ta­tion of the loan ar­range­ments at the vil­lage level.

. Ac­tion Aid and KBZ Bank will pro­vide fi­nan­cial lit­er­acy and book­keep­ing train­ing to the Women Agro Pro­duc­ers Net­work, and will as­sist ac­cess to mar­kets for bor­row­ers through KBZ Bank lo­cal and na­tional net­works.

Both par­ties will iden­tify learn­ing from the pro­ject to in­form next phase ac­cess to fi­nance for small-scale farm­ers. Ad­di­tion­ally, KBZ Bank aims to fa­cil­i­tate the ex­pan­sion of mar­ket ac­cess, and the bank will con­nect the fe­male farm­ers who ob­tained loans from the bank and the mer­chants.

Yu Wai Maung, head of cor­po­rate so­cial re­spon­si­bil­ity at KBZ Bank told Mizzima, “We will in­vite women grow­ers, pro­duc­ers and mer­chants to our of­fice and in­tro­duce and let them dis­cuss the ne­go­ti­ated prices on the prod­ucts through the Women Agro Pro­duc­ers Net­work.”

The pro­ject will be eval­u­ated for its im­pact and suc­cess, with plans to con­tinue and ex­tend the scheme to other parts of the coun­try in the fu­ture.

Fe­male farm­ers work­ing with the loan scheme. Photo: Ac­tionAid

The loan scheme is aimed at em­pow­er­ing women's en­tre­pre­neur­ial spirit. Pho­tos: Ac­tionAid

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