November 9, 2019
Huib Cornielje
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Piloting the development of a supported approach to micro-finance by BRAC and TLMM

This project will use lessons learned from a previous DFID-funded project, which piloted the development of an effective micro-finance model to be used within BRAC - a mainstream micro-finance organisation. This micro-finance model can then be rolled-out across the country as a permanent part of BRAC's micro-finance programme, promoting sustainability after the project has ended.

BRAC will use its vast experience in poverty reduction programming, in Bangladesh and around the world, to pilot the development of a new model appropriate for the context of Myanmar. BRAC will build on their experience in micro-finance, and adapted poverty reduction models to address the situation of people with disabilities in Myanmar from a skills-development, confidence-building and ultimately sustainable economic development perspective.

Through its work on poverty eradication, BRAC has elaborated on a 24-month pathway out of extreme poverty for those on the fringes of society who can’t normally access micro-finance. Through elaboration three main components have been identified as most effective:

  1. Asset transfer of preferably two productive assets (such as a cow)
  2. A cash stipend
  3. Entrepreneurship skill-building

These components are furthermore more effective in combination with health care via partnerships with other external organisations. With these assets, stipend, skill-building, and health care, these individuals and families can, first, meet their own most basic needs. With the meeting of these basic needs, they can begin to have dreams of starting their own business.

Randomised control trials revealed that 4 years after baseline, participants showed:

  • 38% increase in annual earnings;
  • 4% increase in household per-capita food expenditures;
  • 10-fold increase in savings; 
  • additional economically and statistically significant effects on asset ownership, food security, non-food per-capita expenditures, and well-being.

Learning from BRAC’s and other organisations’ pilots, some of the building blocks of these approaches will be adapted to consider the specific needs of people with disabilities and the reality of the markets in Myanmar.

For example, similar to 22 ultra poor households, people with disabilities will receive assets support, technical training on how to manage these assets, and periodic home visits to provide additional technical and business skills and track progress. A key is also the approach of the field staff to the participants who need special coaching and close monitoring. In this project, it is important that the field staff are sensitised to the rights, needs, and concerns of people with disabilities.

As a result of these interventions, after one year the targeted households are expected to see an increase in income, develop confidence and willingness to expand their business. Once these changes are visible among the participants they will be gradually included into the mainstream micro-finance for access to capital and business expansion.

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