Afford Two, Eat One: Financial Inclusion in Rural Myanmar
This paper explores how financial choices such as saving, spending, and investing are affected and influenced by factors such as government regulations, regional banking operations, technologies, and individual needs. This report also explores the financial landscape for the poor in Myanmar, mapping behaviors around and attitudes to savings, investments, loans, and transactions. It aims to provide a foundational reference for organizations wishing to develop products and services for financially constrained consumers in Myanmar. The report maps both, the informal and formal financial landscape including banks, peer savings groups, pawnshops, and loan sharks and explores issues such as motivations for saving, strategies for investment, and triggers for borrowing. On the basis of more than 200 in-context, in-depth, and ad-hoc interviews across Myanmar, the report presents the following findings:
- Faith based (mostly Buddhist) lending groups are growing in popularity and have relatively low default rates, especially given cyclical and seasonal pressures;
- Savers and borrowers appreciate that unlike the larger banks, all loans, profits, and other benefits are circulated into the local community;
- For many borrowers in Myanmar defaulting on the loan would place a heavy burden on them and their family not just in this life, but also in the next;
- One of the most obvious measures of financial fortitude is the number of gold bangles worn by the female traders in the town markets.