FMO is proud to announce its support to Pact Global Microfinance Fund (PGMF), the largest microfinance institution in Myanmar. A US$15 million loan with a tenor of five years will enable PGMF to continue and expand assisting its clients in the difficult COVID-19 affected environment.
As Myanmar opened up nine years ago, the micro finance sector started to grow, allowing more (very) small business access to finance. With a loan portfolio close to US $368 million, PGMF today reaches more than one million clients. Nearly all of them are female micro-entrepreneurs, with an average loan size of US$300.
PGMF has the largest outreach in Myanmar, including the vast rural parts of the country. Together with their nearly 100 percent female client base, PGMF contributes to reducing inequalities within the country and provides access to finance. The investment qualifies under the 2X Challenge Criteria because of PGMF’s commitment to invest in businesses with women ownership. The 2X Challenge calls for the G7 and other DFIs to collectively mobilize US$4.5 billion in capital towards women’s economic empowerment.
On the transaction, Linda Broekhuizen, Chief Investment Officer at FMO said: “We are very pleased to have been able to provide FMO’s first term facility to PGMF. Their commitment to invest in business with women ownership and their ability to reach remote areas of the country are an important contribution to reducing inequalities in Myanmar. We are looking forward to a long and successful relationship.’’
Fahmid Bhuiya, President & COO at PGMF, said: “FMO and PGMF made partnership in a very crucial time when the economy has been effected by the COVID-19 pandemic and other factors, and beneficiaries need more microfinance services than in the pre-COVID scenario. Through this term facility we will provide microfinance support to more than 50,000 poor households.”
Myanmar was named a Least Developed Country by the U.N. in 2018. Although poverty has almost halved, still about 25 percent of the population is classified as poor and one-third of the population is in danger of falling into poverty. Prior to the COVID-19 pandemic, economic growth in Myanmar was projected to increase to 6.7 percent in 2021. However, now this number is set at 2 to 3 percent, due to direct and indirect impacts of the pandemic. PGMF is FMO’s seventh microfinance institution in its portfolio.
Pact Global Microfinance Fund (PGMF) is one of the oldest and largest microfinance institution in Myanmar. Founded in February 2012, as an outgrowth of Pact’s 15 years of microfinance operations in Myanmar. With a loan portfolio close to US$368 million USD, PGMF today manages over 84 percent of the NGO-provided microfinance in Myanmar. Since 1997, PGMF’s microfinance operations have reached 1,936,688 individuals, over 98 percent of whom are women, in 15,919 villages from 88 townships.
PGMF facilitates access to microfinance services for the poor using a group lending methodology and stimulates small business ventures through a range of basic small business development support services. For more information, visit https://www.pactworld.org/country/pact-global-microfinance-fund.