Farmers, Cyclone Victims Offered Microcredit

The Irrawaddy

A Rangoon-based non-government organization, Myanmar Business Executive Group (MBEG), has announced a 50-million-kyat (more than US $40,000) microfinance scheme to help victims of Cyclone Nargis in the western outskirts of Rangoon and the Irrawaddy delta.

MBEG said it would offer loans to cyclone survivors who have no collateral by relying on guarantees from other people in their communities.Speaking to The Irrawaddy on Friday, MBEG coordinator May Oo Khine said, “We are currently lending to 273 families in the Shwe Pauk Kan Township in the outskirts of Rangoon. More than 1,000 people are directly benefiting from these loans.

“We are only targeting families who were affected by the cyclone disaster,” she added.

MBEG was founded in late 2007 by private businesspeople who are all business administration graduates from Rangoon Institute of Economics. The MBEG program is based on the success of the Grameen Bank microcredit scheme in neighboring Bangladesh, introduced some 30 years ago, which, in 2006, earned its founder, Dr Mohammed Yunus, a Nobel Peace Prize for improving the living standards of millions of poor families in the country.

“We give small loans to cyclone victims so they can rebuild their houses and restart their businesses, such as food-vending stalls and other small businesses,” said May Oo Khine.

“Our loans system is based on how much money they can repay. We lend between 50,000 kyat ($42) and 200,000 kyat ($167) depending on how badly the client’s house was damaged. Borrowers must agree to repay loans within six months,” she said.

The six-month loan incurs a fee of 1 percent per month. The daily repayment is normally between 700 kyat (58 cents) and 1,200 kyat ($1). Borrowers are granted loans on the strength of recommendations from five other persons. No collateral is required.

MBEG said it has also assisted an estimated 500 farmers in Kawet Yekanchaung village in Dedaye Township in Irrawaddy Division with a scheme to provide mechanical til