As we come towards year-end, the financial markets continue to be volatile over numerous events amidst a thinning liquidity environment in Dec. Trump is blowing up big time as bad news unravels by the hour. Brexit is getting doomed, oil prices down and the China/Huawei saga is getting worse.
I spent most of the week on a business trip to the capital of Myanmar, Naypyidaw. It was a study trip to visit some of the branches of the microfinance firm I am working with as a financial consultant and to also visit the regulators that are based there.
This is my second trip there, the first one was with my former company in 2015. This amazing white elephant city project was built secretly in 2003-2005 with rumoured help from China. The military had decided then that Yangon is too old and crowded for renewal and the solution was to build a new capital that is midway between Yangon and Mandalay that will be the new showcase capital of Myanmar.
You have to be actually there to appreciate how huge the project was. Most of the multi-lanes roads are usually empty. The widest road has 28 lanes and probably can land a 747 jet plane. I was told that by 2008, most of the government departments were told to relocate themselves from Yangon as Myanmar declared to the world the existence of this new city on an auspicious day in the Burmese calendar.
We spent 2.5 days there, starting on day 1 with an early morning flight at 0630 which lasted only 35 mins. After breakfast, it was to an arranged meeting with the regulators at 0930. The meeting went well and they were very supportive of our microfinance initiative to help the agricultural sector. Farmers formed 36% of Myanmar’s GDP and most are struggling to make ends meet while being subjected to the forces of mother nature. They need lending facilities to buy better seeds and fertilizers and hopefully upgrade the manual nature of their farming processes with modern machinery.
Next stop was to the local wet market to talk to some of our clients who were vendors and wholesale sellers of goods. Most started here in 2008 when the city was newly formed. The CEO and his COO were with us to personally chat with a selection of end clients. We talked to a few ladies who were selling dried goods and fresh vegetables, getting valuable feedback from them.
After lunch, we headed off to a farming community. We were totally taken by surprise when we entered the village’s community building and found 50+ farmers waiting for us… Our CEO spoke to them and explained about our insurance policies built into the loans we provided which ensured that the loan will be repaid should anything unforeseen happens to the borrower. We had a Q&A session before walking over to observe a farmland. The farmer then demonstrated how they used pumps to irrigate their crops with groundwater.
We then returned back to the branch to meet our staff and have an internal discussion. Finally, we met another client (MSME – Micro Small & Medium Enterprise) who was selling traditional Burmese items of clothing called Longyi before calling it a night.
The next day, we had some visitors from a Japanese corporation who wanted a first-hand experience of microfinance for field research. The agenda of the day was to visit 2 branches and end clients. We went to another wet market to talk to a few shop owners who were selling textiles and another that owns a provision shop.
Then it was back to the branch to witness the disbursement of farming loans to the farmers. Over a 3 days period, farmers will visit the branch to sign documents to effect the new 6 months loan, witnessed by their village chief. The cash will then be passed to them once all papers are in order. On this day, there were 73 individual loans being disbursed. Finally, we went to the field to visit an actual farmer on his land. The journey there was longer than we thought and the roads were not too kind to the vehicles we were in.
This trip was a real eye-opener for me. While I have been working in the microfinance sector for a number of years, it was always at the strategy level concerning Treasury related topics of assets and liabilities, stressing on liquidity from an overall HQ macro level. Seeing the results of the company from an end user perspective was heartening and enriching for the soul. I could see the real hardship that the farmers were experiencing, that one year of bad weather can not only wipe out their crops but it can also cripple them financially. Living from hand to mouth was constantly an option that may occur to them suddenly.
With the ability to borrow, they can hopefully break out of the poverty cycle which their forefathers could not escape from previously. Life is hard for them and they really have to work their butts off just to maintain a family. It makes my little contribution all the more meaningful. To see the company succeed is to see the lenders have an improvement in their well being. This, in turn, will help the country’s growth. Myanmar is resource rich but needs a lot of help to develop its assets for the good of its people. I am greatful for this opportunity for me to contribute a small part.
I will be attending my older son’s officer commissioning parade this afternoon. We are all proud of him and so looking forward to the parade. I have seen this young man evolved and changed so much over the last 12 months of his National Service army life. Ah Boyz to Men indeed.
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