At the request of the Dutch development bank FMO, SEO has carried out an evaluation of FMO’s investments in four microfinance institutions (MFIs) in Myanmar during 2014-2020.

Key findings

  1. The FMO investments under evaluation substantially improved access to funding for MFI investees in Myanmar, because these investments:
    • were highly (financially) additional to the funding that was available from other sources at the time of the investments;
    • had moderate (sometimes high) catalytic effects by encouraging additional funding from other sources; and
    • had moderate (sometimes low) non-financial additionality (including via capacity development and Board participation).
  2. The MFIs in turn improved access to finance for their clients (moderate in some cases)
  3. The improved access to finance for MFI clients in turn helped to improve their lives (in terms of employment, income, access to goods and services, and sustainable livelihoods.)

Key recommendations

  • Invest more in Tier 2 and Tier 3 MFIs with high funding gaps and high potential impact.
  • Invest more in financial institutions with potential to serve the ‘missing middle’.
  • Invest more in MFIs that have the potential to expand geographically by using mobile banking technologies.
  • Support MFIs with accessing local currency loans from local banks.
  • Support MFIs with accessing and providing longer-term loans.

Five key information sources were used for this evaluation: (1) relevant literature, project documents and data; (2) in-depth interviews with FMO officers, their MFI clients, other investors, regulators, and local financial sector experts (including through a field visit in February 2020); (3) a focus group discussion with end-beneficiaries; (4) a large survey conducted among nearly 2000 MFI clients and non-clients; and (5) follow-up phone interviews with survey respondents. The survey and follow-up phone interviews were carried out by SEO’s partner Myanmar Survey Research.