Chinese NGO aims to tackle poverty in Burma through microloans

Chinese NGO aims to tackle poverty in Burma through microloans

A Chinese NGO is set to implement micro-finance programs across Burma in a bid to tackle rural poverty. The China Foundation for Poverty Alleviation (CFPA) has announced that it will base ten assistance programs in Mandalay, issuing small loans alongside education and health support.

The news comes out of a Rangoon seminar last week, which addressed human development opportunities presented by the Sino-Burmese relationship.

Au Feng, of the CFPA, told the seminar that the foundation would register under the Ministry of Home Affairs, however he did not present any budgetary details. Offices are planned for Rangoon, Naypyidaw, Mandalay and Myitkyina, the capital of Kachin State.

“The main focus would be in Mandalay to start poverty alleviation programs such as micro-credit, education, health programs and technical and education programs in the agricultural sector.” Au Feng said.

The CFPA will partner the Myanmar Development Resource Institute for programs that will engage a range of government ministries.

Au Feng told the group that for one particular project the CFPA would sign MoUs with the Ministry of Education, the Ministry of Health, and Department of Poverty Alleviation.

Such pacts between lenders and government departments continue to be necessary for the circumvention of Burmese banking laws, which prohibit uncollateralised lending, a crucial element of the micro-finance platform.

Despite this remaining hurdle, micro-finance has emerged as a significant platform for poverty alleviation as development plans coincide with political and economic reforms in Burma.

In 2011, Burma passed legislation allowing micro-finance institutions to operate in the country and began issuing licenses under MoUs. The UNDP had previously run programs in Burma, having stated that the “lack of access to credit to purchase agricultural inputs” was the primary hindrance to the development of people in rural Burma living in poverty.

Private small-loan pioneers the Grameen Bank had also existed in Burma previously, however the scale at which programs were run pre-2011 was limited.

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Shortly after the 2011 legislation was introduced, The International Finance Corporation made micro-finance the focus of their first investment into the former pariah state.

The CFPA initiative comes as Chinese companies are routinely accused of maximising profit in Burma at the expense of local people. Chinese financed mega-projects, such as the Myitsone dam and Latpadaung copper mine have come under intense criticism from local and international activists, the former suspended in a popular political move by President Thein Sein in 2011.

CFPA may now present a potential for improved impressions of China among Burmese people. The future establishment of a “China-Burma Civil Society Assistance Centre” was also raised at the seminar.

Click here to watch a DVB Debate from January on breaking the cycle of poverty in Burma.

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