DVB recently spoke with Thet Naing Win, the general manager of Myanmar Micro Finance Bank, and asked him about who will benefit from his bank’s new loans system.

We learned that the Myanmar Micro Finance Bank is going to open in November? Who are you providing loans to and what kind of loans system are you going to employ?

Just like every other bank, we accept deposits and channel them into loans. In terms of operation, we are going to provide micro-loans and commercial loans. For micro-loans, we will redirect the deposits to cooperative societies via the Central Cooperative Society Limited (CCSL) to provide loans for farmers with low incomes in some 60,000 villages across the country.

So who will receive the loans mainly depends on the CCSL while our part is pretty much redirecting the deposits to them. And commercial loans, we will be directly providing for business enterprises. The loans will be provided in accordance the existing Micro Finance Law, without collateral.

How much interest will borrowers be expected to pay?

It will be in accordance with the regulations set out the Central Bank, according to which we cannot set interest rates at more than 2.5 percent for any loans to the public.

How much is the maximum micro-loan an individual can apply for?

Since we are going to redirect the loans wholesale to the CSSL, it depends on them how much the maximum loan can be.

Is the bank going to be government-owned, or private?

It is going to be a publicly owned bank.  We are planning to invite shareholders in the near future.

So the headquarters is in Rangoon? Are you planning to open branches in other towns? If so, where and how many?

We’ve opened our headquarters on the second floor of the Sayar San Plaza in Rangoon and plan to launch our first branch in South Okkalapa township in November, followed by up to nine other branches in the city. We are also looking to gradually expand operations to other cities such as Mandalay and Naypyidaw. Currently, we have pretty much accomplished preparations for opening, such as building a data centre and banking software. We aim to open about 15 branches within the next year.

Since most of those individuals seeking loans will be relatively poor, what will happen if, for example, they go and gamble all the money away and end up being unable to repay it?

It will depend on the organisation charged with distribution of the loans – the CCSL, in accordance with the Micro Finance La

Do you have plans to introduce a campaign to educate potential borrowers to effectively utilise the loans?

This will be carried out by relevant organisations. Our main focuses are poverty alleviation and regional development. But educating people to spend money more efficiently will not only bring them more income, but will also be more beneficial for the country.

There are similar micro-loan programmes in other regional countries including South Asian nations. Some of them found success, such as Muhammad Yunus’s Grameen Bank in Bangladesh, while some others ended up going bankrupt. How can you ensure that your bank survives?

We have done our best. As we aim to assist the public, we will try to get large amount of deposits while ensuring no loss to our customers’ savings. Being the first ever micro finance bank in Burma, we are hopeful of receiving more deposits from citizens with savings, as well as taking grants and loans from international organisations. We believe we will be able to provide the best service if we have those resources.