Institutional Strengthening of Maha Awba Microfinance

2016-05-31 - 2016-11-30

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. Based on these findings, IFC commissioned LFS to further support the development of Maha by ‘Strengthen Head Office Functions and develop Credit policies and a framework for designing Credit products.
For the project, LFS conducted the following activities: Credit Policy: LFS developed in close cooperation with Maha the credit policy as a high-level document that guides the credit procedures of the MFI (i.e., defines its framework, limits, target clientele, eligibility criteria, and general guidelines). The Credit Procedures per loan product are developed by Maha (see next component). Product Development: The goal of this component was to create a framework (i.e., format, checklists, templates, manuals) that enables Maha to define its five loan products (farmer loan, vendor loan, SME loan, education loan, large loan) and related processes. Internal Audit (IA): This component includes the drafting of Audit Committee Charter, IA Charter, IA Procedures, IA Job Descriptions and IA Report templates. In a workshop it LFS practiced how the Audit Committee shall be prepared and conducted. In addition, the LFS audit expert participated in the first training of the auditors to support the audit trainer. Human Resources: The empowerment of the Human Resources Officer plays a major role in this component. All documents and tools were developed jointly with the Maha HR Officer using relevant LFS materials as needed. Outputs include code of conduct, organization charts, career paths for operational staff, guidelines and templates for annual feedbacks and lists of Key Performance Indicators (KPIs). The definition of all responsibilities per staff is prepared by Maha and the LFS team only reviews the final Job Descriptions and advise on adjustments. Risk Management: Together with the Maha Risk Manager and an IFC consultant, LFS drafted the Environmental & Social Policy of Maha. I addition, the LFS Risk Management Expert conducted a diagnostic review of Maha’s Finance and Treasury Risk Management and operations. Based on international best practice risk management standards and jointly with the Maha Risk Manager, LFS drafted a Risk Management Policy for Maha. Steering Committee and Governance: In this component the support of LFS was limited to develop the Charter and Articles of Association. Staff Training: The LFS training expert compiled a comprehensive list of trainings that are offered in the microfinance sector. Based on this list, Maha selected the types of trainings that are most relevant for their staff. LFS supported this process by hosting a workshop with Maha. LFS reviewed Maha’s selection and commented on it.