CDF in Myanmar aims to enable local co-operative sustainability through creating relevant savings and loan products that will encourage saving behaviour amongst co-operative members.
Farming co-operatives in Myanmar are largely reliant on a 10-year Export-Import Bank of China (EXIM) loan, which is 92% of the their assets. Once the loan expires, a new source of funding would be needed. CDF sought to ensure the co-ops future ability to fund loans by encouraging members to increase savings with their co-ops. However, given the troubled history of the Kyat, the currency of Myanmar, locals are not in the habit of saving, and prefer to buy gold or other assets that can be liquidated when the need arises.
17 Triggers landed in Myanmar to research the financial needs and saving/spending habits of farming co-op members in 2 townships in the Dry Zone. We focused our field research on how co-op members access money, how crop and harvest seasons affect their ability to save, borrow, or repay, and finding motivational triggers to start a new kind of savings behaviour with their co-ops.
Our time in the field lead us to find how farmers were already prone to over-indebtedness because of their seasonal cash flow (meaning that the current loans available to them did not fit their needs). More importantly, our research also found that people were already likely to save, but there was no current process for them to do so with their co-ops. While keeping the farmer co-ops in mind, the team also recognized that other co-op members such as agricultural traders or daily wage earners had different needs around financial products.
We then moved to iteratively prototyping and testing a number of concepts for savings and loan products. The team teased out what would make people start saving, and honed in on 3 kinds of savings accounts that appealed to our targets, even including one for children. We hooked the new savings products to better loans. First, a, capacity-based, flexible-term loan for farmers, and secondly, a trader loan where members can repay monthly capital + interest.
CDF would eventually turn the recommendations into actual financial products. In the meantime, the 17 Triggers team worked with the local Myanmar staff who would manage these products, helping them understand their target audience, anticipate needs and issues, plan the launch of products, and deliver excellent customer service for when they opened their doors and started serving their co-op member customers in new and exciting ways.
In the first 3 days, 677 accounts were opened (415 women and 262 men), 358 New Co-op Members were recruited, with $3,000 in initial deposits. CDF kept the product names proposed by 17 Triggers, and while we set them up with the tools, the strength of the CDF and MyFinance team made the pilot a success.
Some of the project outputs:
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