FAQ

Is PGMF closing?

The government left us with no option but to close our microfinance operation after more than a quarter century of helping to overcome poverty and promote gender equality in Myanmar. Government regulations have made PGMF’s work illegal in Myanmar as an International Non-Governmental Organization. We could not accept the government’s demand to hand over PGMF assets. These belong to the people of Myanmar. We have therefore returned excess savings to clients who have been located, forgiven 890,000 borrowers’ debts,  are working to return funds to creditors, and pre-paid our staff salary and benefits, a bonus and severance. 

What is happening to the debt owed by PGMF clients?

We have forgiven all debts, totaling more than $156 million, held by our 890,000 borrowers.

What is happening to PGMF staff in Myanmar?

The PGMF Board and Management have pre-paid salary and benefits, a bonus and severance to PGMF’s approximately 4,400 staff. We have also met all obligations and paid for any accrued leave not taken and for any benefits owed.

What do you say to the government demand to hand over PGMF assets?

We cannot agree to the conditions being demanded by the Myanmar Government to hand over PGMF assets, including that it could be in breach of U.S. sanctions law.

Why not stay a nonprofit or an INGO?  

We would happily continue working as a nonprofit or an INGO but the government has told all NGOs and INGOs providing microfinance to change into companies and apply for a license if they want to keep operating. This was in the Financial Regulatory Department’s directive of June 4, 2019 (Directive Ref No. Nga Ka Sa/K aka-6 (256/2019)). While in the past the deadline came and went, things are different now. A new Myanmar Registration Law, issued last year, provides for criminal penalties, including prison terms, for not complying with registration rules. It bans NGOs, such as PGMF, from registering to provide microfinance. In essence, therefore, any microfinance work that PGMF undertakes after June 30 would be illegal.  

Why is this happening now? 

Changing from an INGO or NGO to a company is required by the Ministry of Finance of all NGOs and INGOs providing microfinance in Myanmar. While in the past the registration deadline came and went, things are different now. A new Myanmar Registration Law, issued last year, provides for criminal penalties, including prison terms, for not complying with registration and provides that NGOs, such as PGMF, cannot register to conduct MFI activities in-country. In essence, therefore, any microfinance work that PGMF undertakes after June 30 would be illegal.

Why can PGMF and the Government not reach agreement on transformation? 

For the past several years, despite many meetings, the government has declined to issue the letter of no objection. Instead, the government is demanding a share in PGMF’s profits and that we agree all PGMF assets would revert to the government in the future, along with other demands. PGMF cannot enter this arrangement for many reasons, including that this could be in breach of U.S. sanction laws. 

How will this affect PGMF’s current clients across the country?

The Myanmar Government has already severely limited PGMF’s ability to serve its clients. In December 2022, the government told PGMF that it could no longer disburse loans to new clients, take on new savings from clients or onboard new clients. The government also continues to insist that PGMF must hand over funds, taking the position that its assets are not owned by PGMF. We have, however, repaid excess savings to clients who have been located and we have forgiven all 890,000 borrowers’ debts totaling $156 million.

Will clients continue to have access to their loans from PGMF? 

Due to government action, we have not been allowed to disburse loans to new clients, take on savings from new clients or onboard new clients since December 2022. We have repaid excess savings to our clients who have been located and have forgiven $156 million in debt for all 890,000 borrowers.