Kayin Project

Title:
Supporting Financial Access via Cooperative Upgrading and Enterprise and Farm Development in Kayin State

Location:
Hlaing-Bwe Township, Kayin State, Myanmar

Total duration of the action:
36 months, starting March 2014

Objectives:

Overall objectives:

• To contribute to the alleviation of poverty and the reduction of economic vulnerabilities in selected conflict-affected areas in Myanmar.
• To promote financial inclusion among low-income rural households.

Specific objective:

The NSA partner, Community Development Association (CDA), is capacitated to deliver cooperative formation and enterprise development technical services as a replicable social enterprise model for unlocking the economic potential of poor rural households in conflict-affected areas.

Expected Results:

• CDA’s institutional capacity for research, training and managing donor-funded development projects is enhanced, and their range of services is expanded to include forming savings and credit cooperatives and developing and delivering enterprise development technical services.

• The methodologies used by the various field staff of the local authorities for cooperative formation and enhancement, small enterprise development and farm development are enhanced.

• Existing village CBOs are transformed into cooperatives, which provide sustainable access to financial services to their member, and act as a conduit for the delivery of enterprise development training in the villages.

• Appropriate farm and non-farm enterprises based on a value chain approach are adopted by members of the cooperatives.

Direct beneficiaries:

At least 2,000 villagers throughout Hlaing-bwe Township in Kayin State will benefit from training on enterprise development, financial literacy, cooperative formation and access to financial services.

 

Community profile of the Project Area

The township of Hlaing-Bwe is located in the eastern part of the Kayin State along the border with Thailand. It has a total of 363 villages most of which are accessible from the township center or from the Kayin State capital township of Hpa-an. Of the total villages, 35 were selected to participate in the Project.

Access to the villages under the Project is not a problem. One-third of the villages under the project directly go to Hpa-an township for marketing and commercial transactions while the rest go to Hlaing-bwe township. Security is stable with no advisory from the police and military on the restrictions for travel to any of the villages.

In the records of the Kayin State Cooperative Office, there are 16 villages in the Project area with organized cooperatives. A number of local NGOs and INGOs are operating in various parts of the township implementing development programs on health, environment and child development. Development activities of various NGOs complement each other.

There are evidences of village-level financial cooperation among the Thar Yae-Nar Yae groups. There are also groups formed as a result of INGO activities with limited financial activities. Other groups are present and they can also be included in the Project activities aimed at installing savings and lending schemes that will later on be the foundation of the cooperatives to be formed.

Agriculture is one of the main sources of production in the township. The 3 main types of crops planted in the villages included traditional crops like rice and maize; industrial trees particularly rubber and teak; and cash crops that include sesame, beans, peanuts, sugarcane, watermelon and turmeric. Livestock production is basically backyard, not in commercial quantity and is not meant as the main source of income. Animals maintained include goats, hogs and cows. Average farm size is 1-5 acres for rice and rubber. Other crops are also within the size range of not more than 5 acres.

Rice as a main crop is produced primarily for consumption and not for commercial purposes. Those with surplus sell their products at Hlaing-bwe and Hpa-an. This is the same with the cash crops that are produced in limited quantity and does not go beyond the markets of Hlaing-bwe and Hpa-an. Introduction of small-scale processing activities can be initiated as an alternative income source.

Non-agricultural activities are basically retail and services geared towards the needs of local residents. Scaling up of some enterprises can be part of the Project intervention. The non-agricultural economic activities in the Project area are grouped into three types:

• Retail that includes grocery stores in fixed locations and ambulant vending activities within the villages;
• Services that includes food service (restaurants, kitchenettes, tea shops), rice milling, motor repair shop and motorcycle taxi operations; and,
• Small scale production and processing that includes production of construction materials (concrete products and bricks), food processing (pickled fish and jams), and dressmaking and goldsmith activities.

Farmers are also involved in other income-generating activities other than farming to augment their income. In the same manner, most entrepreneurs and business owners are into farming and other agricultural production activities.

The number of financial service providers is limited. MADB has no branch in the township but provide loan services to some villages focused on rice farmers. Most of the farmers and entrepreneurs use their own money for working capital and the financing gap is being filled-up by informal money lenders. Savings facilities are almost inexistent at the villages.

Remittance mostly from Thailand is one of the main sources of income in the Project area. The high demand for workers in Thailand motivated many to cross the border and work either as contractual or as long-term workers. Hundy service provides money transfer services between the workers and their families in Myanmar. Without a dependable savings facility, the money sent back to the country may just be used up easily.

The need for a village-level financial service provider may not be an expressed need, but the demand is there considering the requirement for financing for both agricultural and non-agricultural activities.
This  is a summary of the results of the Participatory Rapid Rural Appraisal (PRRA) conducted from November 2014-January 2015 as part of the data gathering activities for the Project.