Ongo digitises microfinance loan repayments

Digital payment service provider Ongo is partnering with microfinance lender Advans MFI Myanmar Co to digitise loan repayments.

The move will enable Advans borrowers to pay back their loans more quickly and easily with a mobile app or with an QR Card at any Ongo agent, the company said in a press statement.

Advans Myanmar started lending operations in April 2017 and serves over 44,000 clients with a loan portfolio of over K18 billion at the end of June. The MFI offers village banking to clients in rural areas as well as small group lending products and individual loans in urban areas. Advans aims to promote inclusive economic growth in Myanmar by building the financial stability of families, small businesses and farmers.

Digital payment systems can ease the livelihoods of people who depend on finance services for their commercial growth and operations owing to the rising mobile internet penetrate rate, the company added.

“Borrowers in rural areas often face logistical and access challenges, and Ongo provides an easy way for communities, including those in Mandalay and Sagaing where Advans operates, to pay back their loans without having to leave their own homes or business premises,” said Ongo CEO Allen Gilstrap.

“This collaboration will bring more than just business benefits, but an increase in connectivity will empower inclusive economic development for previously underserved families, small businesses and farmers of Myanmar,” said Advans Myanmar managing director Jana Kadian.

All Ongo mobile wallet accounts are monitored and regulated by the Central Bank of Myanmar under the Mobile Banking Licence directive through Myanmar Oriental Bank.

In June, the service provider inked a deal with BRAC Myanmar Microfinance Company (BRAC) to fully digitise the latter’s loan repayments. Under the partnership, BRAC borrowers can repay their loans via the same channels – mobile app or QR card.

BRAC aims to create job and income opportunities for people living in poverty, particularly women, and has lent more than $76 million to a total of 131,319 borrowers since 2014.

In a report published this month, Fitch Solutions, a subsidiary of New York-headquartered Fitch Group,said that money transfer and microfinance sectors in Myanmar would spark the most interest from the private sector.

The microfinance market will be burgeoning as more start-ups introduce solutions making loan approval process more efficient, it argued. The overall fintech industry is expected to grow because of a rising number of mobile subscribers in the country.

In 2016, the Central Bank of Myanmar rolled out the Mobile Financial Services (MFS) regulation, allowing licensees to offer kyat-dominated cash-in and cash-out services, money transfers and domestic payments.

Applicants for the MFS require a minimum capital of K3 billion (US$2.5 million) and an application fee of 0.1 percent of the minimum amount. Fintech companies are allowed to apply for mobile banking licences, which were first issued in 2013 under the support of the Mobile Banking Directive. These licences are given to traditional banks, and fintech firms need to operate under a bank licence.

VisionFund Myanmar (VFM), a British microfinance institution, together with the UK’s Department for International Development (DFID)’s DaNa Facility announced last month they will invest $1.7 million in digital financial services targeting the rural population.

Source: Myanmar Times

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