I bought myself a sewing machine

My name is Daw San San Win. I am 52 years old and live in Pay Kone Village in the township of Kungyankone in Myanmar with my husband and my 8-year old son. We started off as farmers, but we are in the clothing business now.

When I got married in 2010, my husband’s parents provided us with some land to cultivate crops like berries. However, unlike my husband and his family, I wasn’t really interested in growing fruit. That is why, in 2013, I took out a small loan of 80,000 Kyats (50,5 Euros) from the Pact Global Microfinance Fund (PGMF) and bought myself a sewing machine. Later on, I borrowed another 150,000 Kyats (95 Euros) to buy more sewing machines. The third time round, three years after the first loan, PGMF lent me 250,000 Kyats (158 Euros), allowing me to establish a small clothing factory.

When I first established my factory, there were many hurdles. We did not have the technology yet to produce good quality clothing and our suppliers did not trust us enough to provide us with raw materials, so we had to hire a technician to ensure good quality products, and I had to take classes to learn about the different processes.

From that moment onwards, however, the business has just been expanding – continuously supplied by PGMF loans: In 2016 and in 2017, I got 800,000 Kyats (550 Euros); In 2018, I got 1 million Kyats (631 Euros), in 2019, 1.5 million Kyats (947 Euros) and this year even 3 million Kyats (1,894 Euros), all of which I invested into the business. Of course, that is a lot of debt, and there is no such thing as free money, but it enabled me to expand my business, and profit margins. I started out with 5 collaborators and currently employ 25, well actually 24 women and one man. I consider that to be a big success. Fifteen of these have also taken out small loans at PGMF for our cooperative company. Since they have a regular income now, they don’t have any difficulty to repay the principal interest every 2 weeks. This ties up nicely with PGMF’s focus on female micro-entrepreneurs.

To avoid over indebtedness, PGMF only grants one loan per year, so of the seven loans I’ve taken with them, six have already been repaid. Currently, I only have two outstanding loans left: next to the 3 million Kyats from PGMF, there is a 1.5 million Kyats from the Myanmar Agricultural Bank (MADB).

I plan on continuing to grow my company. To save on transport charges, my dream now is to buy my own vehicles to transport my finished products to the city. Such an investment will require further – and bigger – loans, but I am happy to remain a microfinance member with PGMF.

Microfinance

If you are in business and are willing to invest in it, it is not that difficult anymore to get a loan from a microfinance organisation. Only ten years ago, however, the situation was very different. There weren’t many microfinance institutions around – PGMF was one of the only ones, having started in 1997 through a UNDP programme. This all changed in 2011, when the Myanmar government approved a microfinance law, leading to the emergence of a lot of microfinance institutions – over a 170.

This, of course, generated a lot of competition. This is good for the borrowers, ensuring a better service and a wide variety. PGMF’s specialty, for example, is the concept of group loans. I myself am a group loan member. In order to get a loan, you need to apply with four other people, with the members mutually guaranteeing each other’s loans. The system works well. Over the past eight years, we have not had a single bad experience with repayments in our group.

Another important distinction of PGMF is their focus on women entrepreneurs. I think this is a good idea, as men usually aren’t that interested in small loans, and women are better at managing business situations and paying attention to timely repayments; making them more interesting business partners for an MFI.