Diagnostic of Maha Awba’s microfinance business and development of a strategic business plan

2015-03-31 - 2015-11-30

Maha Abwa is a licensed MFI founded in 2013 as a subsidiary of the Myanma Abwa Group, one of the largest agricultural input distributors in Myanmar, serving 3 million farmers. Building on the latter’s established input-credit offering, strong brand recognition, and customer loyalty, Maha Abwa is poised to leverage an extensive existing non-financial distribution network to reach over 350,000 clients with a broad menu of financial services by 2019. IFC approached LFS to assist Maha Awba and the IFC on the former’s ambitious expansion plans. Specifically, LFS was contracted to assist with Phase II of the growth plans, where it will evaluate the microfinance business and develop a business plan.
For the project, LFS conducted the following activities: Maha Awba Diagnostic Institutional Diagnostic and gap analysis The consultant conducted an institutional assessment to evaluate and identify Maha Abwa’s strength and weaknesses. This included looking at the ownership and governance structure, organizational structure, current products and services and related policies and procedures, commercial/marketing strategy, HR, IT/MIS, risk management policy, internal controls/audit, financial management, and funding strategy. To do so, the consultant conducted interviews with Maha’s top management, analysed the institutional set-up at head office and in one branch, reviewed policies, procedures and systems and analysed staff capacity and capabilities Analysis of existing input-credit program The consultant analyzed the existing input-credit program, risks, and recommendations for how this business may be managed under a financial services risk framework Market research/ Focus Group Discussions (FGD), In-depth interviews In order to analyse the needs of farmers and prospective micro clients, the consultants supported a local market research firm in conducting FDG in three regions of Myanmar. In Shwebo, Bago and Hinthada, more than 70 farmers and micro businesses were invited to provide information on their financial needs (credit, savings, payment services) Additionally, the consultants conducted 3 FDG with dealers, farmers and micro and small businesses The market research firm held 6 in-depth interviews with farmers and micro businesses in the above regions Board and Management workshop The findings, areas, of improvement, and funding and TA needs were then discussed in a one-day workshop with Maha Awba’s board and management. Preparing a Business Plan With the findings of the diagnostic/gap analysis, the FDGs and after the discussions and feedback from the workshop, the consultant prepared a business plan. The plan out the strategy, activities, timeframes and objectives for the expansion of the existing microfinance business over a five-year period. It is planned to implement the proposed plan starting from 2016.