Reaching Out to Smallholder Farmers in Myanmar


Aung Si


Co-Author: Thin Ei Ei Soe

7 min read

Summary Points:

  • Despite having the potential for high levels of labor productivity, smallholder farmers do not have ample opportunities to gain financial access.
  • Maha addresses the needs of these farmers with a flexible microfinance model.

Smallholder farmers are the underdogs – in every definition of the word – of the agriculture industry. The majority of these farmers live “in absolute poverty” , making up “half of the world’s undernourished people”1. We need not look further than U San Win, a small-scale farmer in Myanmar, to understand just how dire their situation is. In an interview, he explained how “[he] did not make enough profit” in the year and that he expected more in the next. He added how he has said this every year, and “now [he’s] 60 years old”2.

The reasons as to why profits are not being made remain vast, ranging from natural causes such as climate uncertainties to conflicts such as land-grabbing, financial troubles, etc.

Despite numerous factors going against smallholders, they still remain “the backbone of most Southeast Asian countries’ economies”3.

Smallholders deserve recognition not only because they are unfairly marginalized, but also because they “achieve higher levels of labor productivity than large farms do”3. In Myanmar, the agricultural sector holds 38% of the country’s gross domestic product and employs 60% of its work force. In this sector, turning a blind eye to a major source of agricultural productivity would be counterintuitive. These small-scale farmers deserve any help they can get, and any existing Microfinance Institutions (MFIs) should allocate their time and ability to financing them.

This is the very task in which Maha is participating. Maha is one of the few MFIs in Myanmar that focuses on agricultural loans – it partitions 99% of its loan portfolio to purely agri loans. We devote a significant amount of time, energy, and money to these customers because we believe credit should be given where credit is due, literally.

Daw Hnin Si – one of our oldest clients from Nattalin Branch

Maha serves a total of 10,558 farmers, with the breakdown being 10,442 farmers, 104 vendors, and 12 MSMEs. The average ticket size for our farmer loan is around 700,000 Myanmar kyats (MMK), 200,000 MMK for vendors, and 1.4 million MMK for MSMEs.

Maha’s total loan disbursement has added up to 32 billion MMK (23,040,000 USD) and it holds a gross loan portfolio of 7.4 billion MMK (5,328,000 USD) as of May 2018. Maha believes that its loans should provide for a variety of individuals, and thus, starting on 30 May 2018, we have introduced the MSME loan product for our rural communities. The first disbursement of this kind took place in our Tutkone branch, near Naypyidaw to 12 customers, with the total disbursed amount adding up to 16.7 million MMK.

Having invested in agriculture since inception, we have gathered 3 key learning points to share with other MFIs.

Focusing on the Individual

Maha believes that each farmer deserves the privilege to hold themselves accountable, which is why we provide only individual loans. That Maha works with many smallholders puts the company at risk when it comes to defaults and late repayments. If Maha provided group loans, and when there are defaults or portfolios at risk, then the responsible farmers will have to atone for the irresponsible farmers – this puts an undeserved burden upon the farmers who want to make our loans profitable. Therefore, for the betterment of both the farmer community’s financial habits and the productivity that blooms from it, we wholeheartedly have faith in the practice of individual lending.

U Tin Maung Swe – one of our farmer customers living in Nyaung Wine village

Furthermore, Myanmar is home to many different crops such as green gram, black gram, paddy, potato, garlic, etc. Where Financial Institutions such as the Myanmar Agricultural Development Bank provide loans for just one crop, the paddy, Maha diversifies its loan portfolio to around fifteen of the crops grown in the country. Small-scale farmers should be given loans regardless of the crops they grow because they have no control over climate inconsistencies and mishaps. To grant loans to farmers through just one crop trivializes the hardships faced by these selfless individuals.

Leveraging on Fin-Tech

This is why we have updated our technology by using a fully automated digital credit scoring system. We no longer abide by the traditional system, whereby the credit committee does a face-to-face analysis with our customers. This way, we are quickly boosting yields where yields can be boosted most, and trimming down areas that are not the most productive, in favor of our economy and the betterment our farmers.

Such a system combined with our nationwide network of an ambitious 32 branches in 8 regions of the country ensures that we are tending to all the smallholders that we can. With this size, we are able to minimize the potential inconveniences in interacting with our customers, and make sure we are reaching our max capacity, leaving no farmer out.

Establishing Trust to Form Partnerships

This is, in part, thanks to our parent company, Myanma Awba. 23 years standing, Awba provides invaluable resources for Maha to work with. Awba has been a significant player in the agricultural sector, helping 3.5 million farming families in agriculturally significant rural areas with holistic solutions across the entire agriculture value chain. As such, when small-scale farmers think of Maha, they trust us because its parent company is an incredibly big name in the country. We make sure that this trust falls not blindly to just Awba, but our company itself, as well. With the indispensable value that Awba provides, Maha makes sure it does its job in keeping its customers happy, and more importantly, lively.

Since Awba is a powerhouse in helping the lives of many farmers, IFC has decided to invest in a 20% equity stake in Maha. That the IFC, the largest global development institution, invested in Maha ensures that we are already ahead of the game. We are very fortunate to welcome the strategies that such an experienced presence will bring because it is these global best practices that will make sure we head in directions and consider perspectives we previously have not. The IFC works with developing countries (Myanmar being the epitome of the sort) and in working with them, Maha is certain that small-scale farmers will get the recognition that they so very deserve.

The Maha Team

As we can see, Maha is doing anything and everything in its power to expand its reach in order to potentially tend to every farmer, vendor, and MSME that requires the help of our loans. This goes hand in hand with our financial inclusion work, mainly focusing on investing in further digitizing our in-house credit scoring system by using tradition and non-traditional data points.

  1. Marks, Danny, and Shihab Uddin Ahamad. “Why Smallholder Farmers Need Our Help.” The Myanmar Times, 12 May 2014, mmtimes.com/opinion/10307-why-smallholder-farmers-need-our-help.html.
  2. “Smallholder Farming.” Ifpri.org, 5 Sept. 2013, ifpri.org/topic/smallholder-farming.
  3. Thant, Htoo, and Su Phyo Win. “Farming Sector Faces Uncertain 2017.” The Myanmar Times, 30 Dec. 2016, mmtimes.com/business/24373-farming-sector-faces-uncertain-2017.html.


A. Environmental Stewardship
To protect the environment, we organize programmes like mangrove nursery and Reforestation, Coastal and River Clean-Up, Community Based Environmental Solid Waste Management, Environmental IEC Campaign and Eco-Academy

B. Food Security and Sustainable Livelihood
To ensure a sustainable livelihood for the community, eco-tourism include Buhatan River Cruise Visitor Center Buhatan River Mangrove Boardwalk are run by the community. Others include Organic Vegetable and Root crops Farming, Vegetable and Root crops Chips and by-products Processing and establishing a Zero waste store.

C. Empowered Communities
To empower the community, we provide product and Agri-Enterprise Development Training, Immersion and Learnings Exchange Program, Earth Warrior Training and Community Based Social Entrepreneurship Training


Aung Si

Aung Si is a 19-year-old college student formerly majoring in Mechanical Engineering and now majoring in Business Administration. He was a part of the Cal Poly Racing Marketing team and the Cal Poly Entrepreneurs group. He is currently on summer break and is interning at Maha in the Business Development team. He will return to college in August 2018.

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