Credit Where It's Needed

Aotearoa-based ADC Finance have been operating since 2008, and have distributed more than three million dollars in so-called "micro-loans" to over 12 thousand people in Myanmar. Emily Pavey takes a closer look at the impact the charity is having in a nation still struggling with economic mismanagement and the ongoing violent aftermath of a military coup. 

Five years ago, Don Go Niang was selling vegetables in the local marketplace. Long days of working in the sun often yielded very little for her family. Her husband was in Malaysia, working in restaurants so they could save money. She struggled bringing  up their three young children in a small house shared with extended family. Two rooms slept 12 people.

 Then she heard about ADC and their in-country banking partner, ZMF, providing micro loans to people in North West Myanmar.

 ADC is a New Zealand-based charity providing microfinance through ZMF, empowering people living in poverty to improve their lives, and enabling transformations of households and communities by providing access to client-focused microfinance and related services. Almost all of those receiving the loans are women, using the money to pull themselves and their communities out of poverty. 

Like Don Go Niang, many people living in poor communities across Myanmar are industrious, resourceful and ambitious.

But 70% of people in Myanmar are ‘unbanked’ - that is, they do not have access to financial services or institutions. Sometimes this is due to a lack of access, but more often it’s because of financial barriers (fees, minimum deposit requirements, upfront costs and so on). Without access to microfinance, these people have a strong reliance on personal cash reserves and non-traditional finance sources such as loan sharks and pawnbrokers.

Don Go Niang with her husband and children/ photo ADC Finance 

The Microfinance model is widespread in Myanmar, often used by small farmers to purchase seeds, and paid back when the crop is harvested. 

The practice grew fast following the introduction of the Microfinance Business Law in 2011, and uptake has been strong in a country where so many millions of people exist just below the poverty line. 

By 2016, and the inauguration of the NLD-led government of Aung San Suu Kyi, tens of millions of people were accessing microfinance loans in one form or another.  

"A few years ago I didn’t know about business. Working with ZMF has changed my life" said Don Go Niang. 

That change began when she applied for a micro loan through ZMF. A small loan of just $200NZD enabled her to buy a sewing machine and some materials. This capital, combined with Don Go Niang’s business-savvy, attention to detail, and relationship building skills, was the start of a thriving business.

Since receiving her first loan, Don Go Niang has been able to purchase four sewing machines and employ three full-time workers to meet the growing demand for her clothing. 

A business is born/ photo ADC Finance

She is proud that she has been able to create a “real business” and support other women in her community by providing employment. This ripple effect of the modest business has meant that it’s not just her family reaping the rewards of their labour.

Don Go Niang is among the 92% of ZMF’s clients who are women - often widowed, divorced, single or with partners working overseas.

Empowering women, who are disproportionately affected by poverty, is of particular importance to ADC. Micro loans give women in Myanmar a sense of autonomy, a voice in their community, and independence.

There is also evidence to suggest that women are more likely to use micro loans to improve the prosperity of her children and wider community.

“My business has brought my family closer together. My husband was able to come back from Malaysia. He makes the buttons and sews the button holes. That’s his job, and he is happy to support me!”  

Beyond repaying her loans, Don Go Niang has paid for insurance to protect against unexpected events. Responsible microfinance means ensuring that clients are able to build financial resilience, a factor prioritised by ADC and ZMF.

Covid-19 lockdowns, the ongoing military coup, flooding, and now rising inflation in Myanmar, have demonstrated how important this is. 

Myanmar's economy was struggling even before the military coup, but since the generals took control in February 2021 the economic crisis has only deepened. Inflation and consumer prices are now at levels never seen before, with the Burmese kyat losing around 30% of its value, and some essential commodities nearly doubling in price.  

photo/ADC Finance

Against this challenging economic scenario Don Go Niang,  thanks to her hard work and diligence, has been able to build up a savings pot big enough to build a new home - one with plenty of space for their entire family. 

Its a remarkable achievement by any measure, all starting with that small seed fund of $200NZD. Her story is just one of thousands.

Since ADC’s inception in 2008, they have distributed more than three million dollars worth of microloans to 12,000 people.

Generously funded by public donations, ADC is a charity enabling the transformation of households and communities. With the ability to access credit and adequate support, those who were living in a cycle of poverty, faced with an inability to increase their earnings, now have a chance move forward.

Done right, microfinance means improved food security, access to healthcare, improved housing, and education for the next generation. 

If you would like to support the work of ADC, please donate: www.adc.org.nz. Your gift can transform households and communities, and enables resourceful and resilient people to lift themselves out of poverty.

- Asia Media Centre