Over 80pc of social investments in microfinance: report
Representatives of the funders’ network said this during the Myanmar Social Investment Forum hosted by AVPN on Tuesday in Yangon.
The report said that Myanmar received 15 impact-investing deals, which is the second highest number in Southeast Asia, between 2007 and 2017, but received the second lowest amount of capital at US$ 26 million, according to the Global Impact Investing Network.
Over 80 percent of those investments were in microfinance.
The report went on to say investor interest in the country has been gradually increasing, especially since mid-2018.
High-gap areas of social investments in Myanmar are livelihoods, nutrition, health care, energy access, financial access, women empowerment and environment sustainability.
“There is still less interest social-impact investment in Myanmar, with people here concentrating moreon business and donating to charities.
Now, international organisations and local businesses are beginning to address the situation,” said U Aung Naing Oo, director general of the Directorate of Investment and Company Administration.
“Investors in Myanmar are often interested in being the first movers. With the current economic slowdown, such investors have a better chance of being first-movers through investing with impact,” said Allison Hollowell, chief strategy officer of AVPN.
APVN says that new legislation such as the new Companies Law and moves by the Central Bank of Myanmar to relax collateral requirements will improve financing for SMEs, while the recent wave of impact funds and development finance institutions entering Myanmar will give a boost to the country’s impact-investing market and growing social enterprises.
However, challenges such as political uncertainly, economic slowdowns and possible trade sanctions also pose new challenges to entrepreneurs and investors even as the lack of common ground between social enterprises and investors makes it challenging for social investment to grow.
Even so, Myanmar has seen an increase in the numbers of capital providers and intermediaries, with more capital providers and intermediaries who support NGOs and social enterprises coming to Myanmar.
.However, even with the appearance of more socially-focused investores, many NGOS and social entrepreneurs still find it difficult to build solid businesses and make a big enough impact on society showing there is still plenty of room for improvement.
There seems to be a gap between capital providers and intermediaries on one side, and social entrepreneurs on the other side. There is an opportunity for social investors to provide their funding more effectively.