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Published on 28/08/2019

Stronger together: unity of farmers in the Delta

After more than 10 years of presence in the Ayeyarwaddy Delta region in the south of Myanmar, GRET is gradually withdrawing from this area, with a sense of having fulfilled its duty.

In May 2008, cyclone Nargis hit the Ayeyarwaddy Delta, affecting more than 2.4 million people and causing the death of 140,000 among these. 95 % of dwellings were destroyed by the hurricane, 800 000 people were displaced and 783,000 hectares of rice paddy fields were submerged. With funding from the multi-donor fund Lift (Livelihoods and Food Security Funds), GRET and German NGO WeltHungerHilfe, a project to re-start agricultural activities in the provinces of Bogale and Mawlamyingyun was launched.

During its implementation, the Delta programme covered all dimensions of agricultural activity, considering farmers to be resilient stakeholders. GRET’s support consisted mainly of advising family farms, in particular strengthening the capacities of seed producers. The NGO also supported the creation of famer organisations and networking among the latter, facilitating access to certain services for its members.

Innovative financial services

In 2012, GRET decided to set up innovative financial services in these provinces to respond to the funding needs of agriculture and farmers. Two financial products were initially proposed: leasing credit and storage credit. Leasing credit is a credit whereby the lender provides rental of a property to the borrower, together with a promise to sell; this can be concluded with the transfer of the property to the borrower. Storage credit, also known as warrantage, is a rural credit system whereby a farmers’ organisation and/or its members, obtains a loan by pledging their production as a guarantee (mainly cereals).

In 2013, with funding from the Danish overseas cooperation agency, this support was extended to bauthama, small farmers with little or no land, who represent two thirds of the population in the Delta. One year later, a microcredit intended for bauthama was proposed. Once the financial products were put in place, GRET opted for an original form of management organisation, based on a strong sense of ownership by villages. Village committees possess the credit funds, examine loan applications, decide if loans are granted, and ensure repayment of loans.

In 2014, it was decided that a microfinance institution governed by Myanmar law would be set up, in order to establish financial services over the long term in the territory. This strategy required the achievement of three objectives:

– ensure the institution’s financial sustainability;

– identify the most appropriate legal form;

– strengthen the capacities of the local management team and the credit committees, in order to ensure withdrawal of GRET’s technical assistance.

This new phase, entitled Fidel (Financial inclusion in Delta), received financial support from new donors, such as Singaporean foundation Leap, USAID and GRET’s endowment fund.

The creation of Ayam, a network of cooperatives

Governance model scenarios changed many times. It was necessary to work with Myanmar legislation, which underwent several reforms in recent years. In the end, the model selected was a network of cooperatives, called Ayam (Ah Yar Ah Man) and a management company named Sam (Su Paung Ah Man, a registered company with limited liability), made up of former GRET staff members. The cooperatives and the company are bound by a contract for provision of services, with Sam ensuring management of the fund and its control on behalf of the cooperatives.

When it started operating, the Ayam network had 21 cooperatives grouping together more than 120 villages. To date, more than 1,400 leasing credits were granted to farmers to invest in productive equipment. 10,000 small loans were provided to farmers with no land, to create livestock farming, horticulture or market gardening activities, and 1,000 tons of rice were pledged against loans granted to poor rice farmers. And this is just the beginning…

More information on the FIDEL projectBas du formulaire
More information on the Ayeyarwaddy Delta Programme
More information on GRET’s microfinance activities
See GRET’s activities in Myanmar