The MetLife Foundation announced its plans to dive into financial inclusion grantmaking in 2013. Shortly after the announcement, it pledged $200 million toward those efforts focusing on Asia, Europe, Latin America, the Middle East and the U.S., and it seems to be moving through that initial $200 million commitment relatively quickly, adding a $250,000 grant to support Accion's microfinance work in Myanmar.
The grant will be awarded over two years in support of Accion’s new microfinance institution (MFI), Dawn. Accion will use MetLife’s grant to help grow its MFI, located in Myanmar, into a sustainable institution with expansive outreach. Accion also received an investment lift from FMO, a Dutch development bank, and Triodos Investment Management to help with its scale and capacity building plans.
For now, the MetLife grant will be put to use in building Dawn’s institutional capacity by supporting some of the costs related to product and services expansion, improving internal controls, and prioritizing consumer education, to name a few. The overall goal at Dawn is to grow its loan portfolio from around $2.5 million to over $40 million within the next five years.
So why is Myanmar to be one of financial inclusion’s "final frontiers?" The short answer: Because it pretty much lags behind the rest of the world, as far as doing business is concerned. Not to mention that roughly 25 percent of Myanmar’s population is poor, and nearly all of that population (estimated at between 80 to 90 percent) have no access to formal financial services.
Last year, the Economist reported that although three years had passed since President Thein Sein came to office with his reform program in hand, Myanmar still ranked among the worst countries in which to start a business, but to conduct business as well. The problems are varied, but a maze of bureaucratic red tape and run-down infrastructure don’t help matters.
Although the Economist’s reporting may be more skewed toward big business, it applies to small businesses as well. This is especially true when it comes to microfinance, as it is one of the most accessible methods by which the world’s poor can get their hands on the cash needed to start their own businesses.
Dennis White, president and CEO of the MetLife Foundation noted that in impoverished populations, “Many are low-wage workers, microentrepreneurs and small-scale farmers, and we’re convinced that access to modern financial know-how and a range of services that fit their needs can transform their lives.”
Accion was among MetLife’s first financial inclusion grantees along with Corporation for Enterprise Development, the Consultative Group to Assist the Poor, Local Initiatives Support Corporation, Pro Mujer and Women’s World Banking.
The foundation also launched the "Financial Inclusion Challenge" in partnership with the Wall Street Journal. The two-year, global project is part of the Journal’s "Financing the Future" program, a major editorial initiative that provides news, statistics, and other insights into the estimated two billion people who are currently excluded from the world’s formal banking systems.