Major microfinancier pulls out of military-ruled Myanmar

By Admin 27 Jun 2023

DMG Newsroom
27 June 2023, Sittwe

Pact Myanmar Microfinance, which has provided loans to over 2.3 million Myanmar people, has announced its exit from the military-ruled country, saying new regulations adopted by the military regime have made it impossible to continue operations in the Southeast Asian nation.

Myanmar’s junta has banned the Pact Global Microfinance Fund (PGMF) from providing new loans to clients and has denied visas for the organisation’s senior leadership while strict foreign exchange controls have further limited PGMF’s operations, the organisation said in a statement on Monday.

The largest microfinance provider in Myanmar said it will cease operating in the country after June 30, a deadline imposed by the regime for the organisation to comply with new regulations.

“We have sadly concluded that we can no longer operate in the country despite working diligently over the last two years to persuade the government in Myanmar to allow the organisation to continue serving hundreds of thousands of borrowers and savers,” said Ellen Varney, chair of the board for PGMF. “By denying us the ability to register, the government has forced us to either leave or to operate illegally.”

“We stopped providing new loans in January,” said an official of the Pact Myanmar office in Shan State.

The organisation said it would forgive more than $156 million of the outstanding debts of 890,000 borrowers and set aside money to repay creditors.

Pact Myanmar operates in eight townships in Arakan State, where the closure leaves more than 300 people jobless, according to a staff member of the PGMF office in Taungup Township.

According to the PGMF statement, the company employed approximately 4,400 people across the country.