UN Capital Development Fund

Greetings from
ASA MICROFINANCE (MYANMAR ) LTD

ASA Bangladesh
ASA (meaning hope in Bangla, Mulinza in Myanmar) is one of the largest,
cost-efficient and sustainable MFIs in the world. Established in 1978, ASA
started microfinance services with an innovative Costeffective and
Sustainable Model for reaching low income families including poor in
both the urban and rural setup.
The model is widely regarded and proven as one of the successful
replicable model of microfinance services for the low-income households
with fast scale-up capabilities.
As of October 2016, ASA is serving about 7.7 million low-income
households. Female clients are >91% of the total clientele.
Loan portfolio stands at over USD 1.6 billion while deposit at USD 701
million.
ASAs operational area consists of 85% rural and 15% urban and semiurban areas.

ASA Bangladesh - Recognition

Global Magazine of Switzerland chose ASA as one of the 100 best of the
world
ASA was selected as one of the five top MFIs by the Fondazione Giordano
Dell Amore in Italy
Best MFI of the world by the Forbes Magazine List 2007 among the 50 top

MFIs
In 2005 MIX Global 100, ASA ranked as ONE of the BEST THREE MFI
considering six areas of performance namely outreach, scale, profitability,
efficiency, productivity and portfolio quality
UNDP selected ASA as best international technical service provider among
66 institutions in 2002

ASA Bangladesh global footprint

GLOBAL FOOTPRINT OF ASA
ASA microfinance model has attracted huge attention from different
stakeholders around the globe for its adaptability in different country context
in achieving sustainability, cost-efficiency and fast scaling capability.
TECHNICAL ASSISTANCE SERVICES Since 1993, ASA has been providing
Technical Assistance (TA) to NGO-MFIs around the world in more than 18
countries around the world, including: Laos, Cambodia, Tajikistan, Jordan,
Ethiopia, Myanmar, Afghanistan, Peru, Mauritius, Indonesia, Yemen, India,
Pakistan, Sri Lanka, Mexico, Nigeria, Philippines and Vietnam
ASA provides TA in implementing high-growth ASA Model mainly through
establishing and operating model branches as well as upgrading the existing
branches.

ASA International
ASA International is a microfinance holding company registered in
Mauritius (in 2007) and Netherlands, which has as mission to
financially empower the low income and poor population of the world
through microfinance.
ASAI established microfinance institutions (MFIs) in 13 countries in
Africa & Asia, including the Philippines, Sri Lanka, India, Pakistan,
Nigeria, Ghana, Cambodia, Kenya, Tanzania, Uganda,

Rwanda and Sierra Leon.

Myanmar,

ASA INTERNATIONAL Greenfield

Each of the organizations was built from the ground with the support
of ASA. ASA is providing technical support to each subsidiary of
ASA International and is responsible for the implementation of the
proven ASA Model of Microfinance in the different countries in Asia
and Africa, adjusted to meet local conditions and requirements.

As of September 2016, ASA International has a total loan portfolio of

USD 187 million in 1,128 branches, 7,072 staff and 1.28 million
borrowers

Development Agenda in Myanmar

Government Agenda :
Reduce Poverty 16% from 25% by 2018
Microfinance Law enacted in Nov. 2011 in a bid to reducing Poverty
Interest cap on Loan : 30% per annum and
Interest on Savings/Deposit: 15% on compulsory and l0% on
voluntary (where central Bank impose 13% interest on lending
and 8% on savings)
Devalued Kyats against USD (concern for the foreign investors)
frequently
168 MFIs obtained Microfinance License, working for poverty
reduction

Myanmar-Favorable grounds For Micro-finance

Excellent Clientele behavior
Micro finance Environment is less
Competitive
Stable Safety and Security Situation
Potentials Clients are 9 Million
Literacy Rate 92.3%
64% women are involved in economical
activities
31% are women headed Households
25.6 % are living under poverty line
Only 6% rural Population has access to
Credit
90% savings are mobilized by Banks.
Favorable Government Policy

Origin of ASA Micro-finance (Myanmar) Ltd.

DICA Registration : 19th November, 2013
Obtained Microfinance Business License : 28th August, 2014
Operation Started on 1st September, 2014

First Loan Disbursement : 27th September,2014

Obtained Permanent License : Nov. 2015
Operation Started at Bago Division : 30th July, 2015

Operation Started at Mon state: 1st May.2016

Project Goal:
Vision
Poverty reduction through economic empowerment by ensuring access to financial
service to the under privileged community of Myanmar.
Mission
Establish a deposit taking microfinance institution for creating and enhancing access to
responsive and client friendly savings led microfinance services for the low-income
households in Myanmar.
Objectives
AMML Myanmar is to reach 290,225 clientele in next five years through emphasizing
mostly on savings led microfinance services and through strengthening the local
capacity in terms of institutional, organizational and technical aspects.
ASAI also seeks to diversify in accordance with the needs over time to best serve
clients through sustainable and cost effective and responsible financial services with
efficient and viable operations.
Target Group
Low income households
Primarily women (One member per family)
Those who live under poverty line & income below USD 2 per day
Engaged or to be engaged/employed in income generating activities
Without access to commercial banks and Micro-finance Institutions.

ASA Myanmar Management Organogram

Board of
Directors

Executive Committee

Audit & Risk

Committee

CEO

COO/DMD
Chief Financial
Officer

Finance
&
Account
s

Treasury
,
Funding
& MIS

Company
Secretary
FMPU

HR,
Admin
&
Training

IT

Operation
& Business
Developme
nt

ASE

DM

CCRC

ESG

Legal,
Corporate
&
Compliance

Risk
Manageme
nt

Internal
Audit

GMC

Field
Auditor

AM/RM

Branch
(1 BM & 4
LO)

= Direct

Note: All Board Committees are headed by the BoD

members

coordination
= Indirect
coordination

Highlights of Operations in Myanmar (2017-2021)

as per Business Plan:
Regions/States :

Yangon, Bago, Mon, Mandalay, Magway,

Ayeyarwady

Location: 50% rural and 50% urban and semi-urban areas

Each Branch: 1 Manager and 4-6 Development Officer
Borrowers per branch would be 1,200 2,100
By 2021, 130 branches, 290,225 clientele, around USD 75 million
loan portfolio and USD15 million savings balance is projected
Out of total 1,085 staff, 98% staff will be recruited locally by 2021.

AMML - Group Formation Process

1. Area Selection
2. Branch Selection
3. Potential Members Selection though personal Contact
4. Small Group Formation
5. Large Group Formation
6. Orientation for Members(4 weeks)
7. Members Selection for credit through capacity assessment
8. Fill Up Loan application Form
9. Loan Disbursement in the office
10.Collection of Installment.(Weekly/Bi-weekly and monthly)

Target Achievement as per PBA of UNCDF:

(Considered Proposed Targets of proposed March - 2017)

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16

01. CLIENT OUTREACH:

Number of Active Depositors
Rural Depositors (%)
Total Voluntary Savings (US$)
Number of Active Borrowers
Number of Active Women Borrowers (%)
Rural Borrowers (%)
Total Gross Loan Portfolio (US$)
Average Loan Balance per Borrower (US$)
Number of total Staff
Number of Women Staff
Number of local staff
PAR > 30 days (%)
Operational Self-Sufficiency (%) (Annualize Q3)
Operating Expense/Loan Portfolio (%) (Annualize for Q3 16)
Deposit to Loan Ratio
Cost per borrower USD as of Oct 16

UNCDF Target
March-17

Achieved Up to
October 16

Percentage of
Achievement

54,000
50%
810,242
45,000
95%
50%
4,051,210
90
301
40%
292
<5%
116%
27%
20%
24

71,113
38%
1,112,794
59,849
99.95%
38%
7,324,749
122
353
59%
336
0
90%
34%
23%
28

132%
75%
137%
133%
200%
75%
181%
136%
117%
149%
115%
81%
115%
118%
117%

Five Years Business Plan (2017 2021)

Myanmar KPIs
SL

Description

Number of branches

Number of Loan Officer (LO)

Number of active clients

Loan Outstanding Portfolio (LOP)

(000)

Savings/security/cash-collateral (000)

Average clients per branched

Average LOP per clients

Average savings per clients

Projection
2016RB

2017B

2018E

2019E

2020E

2021E

44

60

80

100

115

130

226

314

480

600

690

780

70,617

130,217

167,200

213,750

251,275

290,225

12,011,64 31,368,83 47,652,00 73,102,50 97,871,61 130,964,03

7
1
0
0
3
1
14,620,50 19,574,32
2,900,235 7,842,208 9,530,400
26,192,806
0
3
1,605

2,170

2,090

2,138

2,185

2,233

170,096

240,897

285,000

342,000

389,500

451,250

41,070

60,224

57,000

68,400

77,900

90,250

Demand For Savings - A Study

Studied on 500 Households of 10 Township in Yangon
All are from Poor and low income Group
Objectives were their demand for Children Education Savings and
Long term savings
Study Results:
94.7 % are interested to save long term deposit ,
amount MMK 5,000-10,000
48.9% are interested to save for their Children Education,
Amount would be MMK 1,000-5,000
Study Results shows that there is a huge demand for
Children Education savings and Long Term Deposit

Savings - A challenge for MICRO Lead MFI

Savings Collection:1.64 Million USD
Type of Savings: Compulsory and Voluntary

Wish to start : Education Deposit Scheme, Term Deposit Scheme

Challenges Faced:
1. FRD directives: 5% Mandatory and 5% Voluntary on Disbursement
2. Interest on Deposit: 15%

If those restrictions were withdrawn,

our savings collection would exceed 50% of GLP(almost $3.5)

Poor Population would get $346 000as interest

AMML would able to use $3.7 Million deposit as Loan Revolving funds

Establishing trust rapidly among the clients with substantial manner;

Savings mobilization from rural areas;

Challenges faced

Inexperienced Local Staff

Staff Turnover
Language Barrier
High competition for Professional Staff
Limited Knowledge on Microfinance
High Living Cost
Licensing / approval Process
Cap on Interest Rate
Savings collection limit and interest rate
Profit within two consecutive Years
Fixation of interest rate on foreign
borrowings

Learning by Doing

Increase Loan size (Microfinance Loan)

Maximum limit for loan size is
MMK400,000.
Current disbursement trend is less
MMK300,000.
Increase average loan size is around
MMK100,000.
Introduction of 6 months product
MMK 200,000-300,000. Increment MMK
100,000

Start of Enterprise Loan (Small Business

Loan)
Start from July 1, 2015. MMK 500,0001,000,000
Introduction of Interim Loan Product
Start from August 1, 2015.MMK 200,000300,000
People are savings minded

HR Issues

Staffing (Total 353, M-143, F-210 (59%) & Expat. 17-16 operational
expert)

Staff Dropout ( Beginning: 40% in 2014, Now 4% in 2016)

Capacity Improvement (Training, Coaching, Mentoring)

Staff

Trained:

450

(Pre-Service=12

days,

Monitoring

and

Supervision-2days, Refreshers Course, Financial Literacy)

Local capacity Development: BM-49, ABM-45, Manager Finance and

Accounts and Manager IT, Manager Audit and Asst. Manager
Training & HR.

Precaution taken to check fraud and

misappropriation

Members Selection Process

Strong Monitoring System

Set up Fraud and
Misappropriation Unit
Internal Control Mechanism

Risk Management Framework

Formation of Risk Management Unit
headed by Internal Auditor.
Risk Management Coordination
Committee consists of the heads of all
departments headed by the Managing
Director.

Risk Management Orientation Program has also been

carried out to every Branch separately by Manager Training
& HR.
Established Risk Appetite and Produced Heat map

Following third line of defense in risk management

framework

Lessons Learnt
01. Borrowers Repayment Capacity
02. Repayment Behavior of Client
03. People are naturally Peaceful
04. High Staff Turn over
05. Women are Entrepreneur
06. Language Barriers
07. Unwilling to attend weekly/biweekly meeting
08. Prefer Biweekly installments
09. High living costs
10. Quality of local staff

11. Inadequate professional staff

12. Government policy and sustainability

How AMML is Different?

Self Sustained and Cost effective Model

Standardized cost and materials
Two Tiers of Management Structures
No accountant in Branch or Area Level.
Bottom up approach for development, where learnt from grounds.
Eager to introduce different products of Savings for the poor
Staff capacity development from internal sources
Established CPP in proper way
Planned to introduce CSR activities towards the end of 2017
Introduction of Environment and Social Management System that includes SPI4,
Client complain resolution (each branch had complain box), exclusion list, client
economic yield survey on a simple and sampling way etc.
Unique Training and Coaching for capacity development of staff (each one and
teach one approach)
Financial literacy issues discussion with clients

How Faster Growth is possible

Expansion as per Business Plan
Accurate Feasibility Study before Selection of Area/Branch
Proper Training for capacity of staff as per planning(each one teach
one)
Utilization of Expatriate experience in training and expansion
Supply of logistics for operation in the nick of time
Decentralization/ Delegation of Authority
Strong Internal Control
Introduction of Automation System
Ensure Funds( Capital and Loan funds) in time
Supply of Operation Cost from UNCDF in time
Excellent Cooperation from FRD in receiving approval.

Current and Emerging Issues

FRD Directives:
01. Deposit Taking MFIs should have:

Three Years Working Experiences in Myanmar

Need to make profit in 2 consecutives years

02. Restrictions on foreigners movement and staying

03. Cap on interest rate

04. Organizational Sustainability

Future Role of MICROLEAD - Suggestions

Micro Lead Can include more potential MFIs under its Coverage
Invest Funds for Rural Financing
Organize Loan Funds for Small, Medium and large MFIs
Special Program on Women Development
Introduce CSR activities

Provide Funds for staff capacity Development of MFIs

Play vital role in the Financial Inclusion of Myanmar

Thank You!
Muhammed Faridur Rahman

Managing Director
ASA Microfinance (Myanmar) Limited.
No. 78, Thazin New Street, Kha Yae Pin Villa-2,
Mingalardon Township, Yangon, Myanmar.