The loans were first introduced at the ZES garment factory located in Hlaing Thar Yar township, with more than 160 workers who took advantage of the facility, which will then be expanded to other factories.
This loan service seeks to meet demand in a segment of financial services that could support additional sources of income, pay off bad debts and cover unforeseen emergencies for garment workers. Microfinance loans of up to K500,000 will be available for factory workers and staff, with the average loan amount obtainable being 20% of monthly salary at 2.5% monthly interest.
The manufacturing sector has been the driving force behind the country’s urbanization process, with many garment workers migrating to Yangon from rural areas for work.
Research informing LIFT’s migration agenda reveals that around 20 percent, or one in five people in Myanmar migrate within the country, moving from rural areas to urban centers in order to gain better opportunities. employment and training. Better jobs and better training then allow them to support themselves, their families and their communities in these rural areas. Guerol Sari, COO of VisionFund Myanmar, said the loan will improve access to education, health care and other social services.
“We are very happy to introduce the loan facility to this hard-working segment of our community and hope the service will create many opportunities for them, and subsequently improve aspects of well-being through increased access to the loan. education, health and social protection, ”he said. .
Sandar Aung of LIFT said that VisionFund’s new garment worker loan service was designed to support people, especially women, who had moved from a rural area to Yangon to work in the garment industry.
“It’s not necessarily easy to move to a new city, a new job. Difficulties faced by people include debt, high interest rates, costs of moving and settling in a new place.
“And it’s more difficult because they don’t have access to financial institutions or don’t have all the information they need to manage their money so that they can live safe, healthy, and equally. support their families at home in rural areas, ”she explained.
LIFT’s partnership with VisionFund has also resulted in the introduction of three loan products: for debt refinancing, the purchase of small-scale agricultural technologies, and a line of credit for agriculture and small businesses.
VisionFund Myanmar is a wholly owned entity of VisionFund International, a UK-based non-profit organization which has a network of microfinance institutions in over 30 countries. As of August 2017, VisionFund Myanmar had served more than 152,000 clients (87% of whom are women) with a total loan portfolio of over $ 25 million. VisionFund International is the microfinance subsidiary of World Vision.