56 Financial Landscape 4.3.2 LOAN FROM MICROFINANCE INSTITUTIONS Microfinance was widely seen as a key development tool to promote financial inclusion and to alleviate poverty in Myanmar. While cooperatives exists in the country since the early 20th century, microfinance was first introduced to Myanmar in 1997 by UNDP’s Human Development Initiative. In November 2011, the Government passed the new microfinance law, paving the way for expansion of microfinance services by allowing local and foreign investors to establish wholly private owned Micro-finance Institutions (MFIs) in the country (Duflos et al 2013).This new microfinance bill imposed interest rate caps for micro loans (maximum loan rate of 2.5% flat per month) and micro savings (minimum interest rate of 1.25% per month) (Myanmar Microfinance Network 2012). There were two main microfinance organizations found active in Myanmar especially in Mawlamyine providing loans at low interest rate: (i) World vision (ii) Save the children. World Vision offered money for investments, especially for children’s primary education. To apply for a loan, requirements were a copy of national ID-card, a copy of family registration card, a recommendation from leader of 100 households, photographs, personal recommendations to each other in the group. Rate of interest was 2.5%. For each project, World Vision allotted MMK 1,500,000 ($1500) and lent maximum MMK 100,000 ($100) to an individual. Monthly repayment instalments were protocol. They lent to 15 people in one cycle and used the money gathered from interest to lend to other people. With the money collected in the form of interest, World Vision supported stationery to primary school children twice a year; once at the start of the session and once in the mid. Once the project started volunteers were chosen from the same place who were really interested in the welfare of society. That group handled the money, collected documents from all the applicants, made list and alloted money via lucky draw system to be neutral and impartial. They spread the news about the project via advertising on tea shops and trees to let people know about it. Head of the village was the administrative officer of the project. One project lasted for 3 years. Applicants were required to come to world vision office 2-3 times to attend the meeting Mett was a volunteer with World Vision in the past