VisionFund Myanmar recently announced the launch of a new microfinance loan product exclusively for garment factory workers, funded by the Livelihoods and Food Security Trust Fund (LIFT), according to a press release on 16 February.
The loans were first launched at the ZES garment factory located in Hlaing Thar Yar Township, with over 160 workers availing themselves of the facility, which will subsequently be extended to other factories.
Many workers in the garment sector have migrated to Yangon from rural areas. Research informing LIFT’s migration programme shows that around 20 per cent – one in five people – in Myanmar are migrating within the country, moving from rural areas to urban areas to find better jobs and training opportunities to support themselves, their families and communities back in rural areas.
Mr. Guerol Sari, Chief Operating Officer of VisionFund Myanmar commented, “We are very pleased to introduce the loan facility to this hardworking segment of our community and hope the service will create many opportunities for them, and subsequently improve aspects of wellbeing through increased access to education, health and social welfare.”
LIFT’s Rural Finance and Private Sector Partnership Officer, Sandar Aung said that VisionFund’s new loan service to garment workers was designed to support people, particularly women, who had moved to Yangon from a rural area to work in the garment sector.
“It is not necessarily easy to move to a new city, a new job. Difficulties people encounter include debt, high interest rates, costs of moving and establishing themselves in a new place. And it is more difficult because they do not have access to financial institutions or have all the information they need to manage their money so they can live safely, healthily, and also support their families back home in rural areas,” said Ms. Sandar Aung.
VisionFund’s new loan service was launched in response to a need in this segment for financial services that could support extra sources of income, payoff bad debt, and cover unexpected emergencies. Microfinance loans of up to MMK 500,000 will be available to factory workers and staff, with the average loan amount obtainable being 20% of the monthly salary at an interest of 2.5 percent per month.
LIFT’s partnership with VisionFund has also resulted in the introduction of three other innovative loan products: for debt refinancing, purchasing of small-scale agricultural technologies and a credit-line for agricultural and small businesses.
VisionFund Myanmar is known for its emphasis on providing quality financial services to underserved communities with a special focus on empowering women. As a subsidiary of World Vision, the MFI’s vision is to ensure the wellbeing of children in poor communities through its microfinance work. VisionFund has been operating in Myanmar since 2015 and currently serves over 170,000 clients through 44 branches.