The United Nations Capital Development Fund (UNCDF) has launched a Credit Guarantee Facility to support economic recovery and rebuild livelihoods in Myanmar following the devastating March 2025 earthquake. The initiative is designed to strengthen resilience in fragile communities by reducing investment risk for micro, small, and medium enterprises (MSMEs) that continue to face severe financial constraints in the aftermath of the disaster.
Through a partnership with Myanma Apex Bank (MAB), the facility provides a portfolio guarantee that enables the bank to extend credit to microfinance institutions, which then offer short-term microloans to small businesses in earthquake-affected areas. These loans are intended to support working capital needs and income-generating activities, helping entrepreneurs restart and stabilize their businesses in a context where access to finance is highly limited.
The program begins with an initial investment of around USD 800,000 in local currency, structured through a recycling model that allows the capital to be deployed in two cycles over 2.5 years. This approach is expected to unlock up to USD 3.2 million in total financing for micro and small enterprises, significantly expanding access to credit despite constrained financial conditions and limited foreign currency availability.
A key feature of the facility is its focus on financial inclusion and recovery in underserved sectors such as agriculture, informal retail, and household-based enterprises. By lowering collateral requirements and strengthening the ability of financial institutions to lend, the initiative helps channel funding to entrepreneurs who are typically excluded from formal credit systems, ultimately benefiting an estimated 30,000 people across vulnerable regions.
The program also places strong emphasis on gender inclusion, with around 80 percent of the 6,000 expected micro-entrepreneur beneficiaries being women. This targeted approach aims to support women-led businesses and strengthen their role in local economic recovery, while also contributing to broader community resilience.
UNCDF highlights that this initiative works in close alignment with partners such as the United Nations Development Programme (UNDP), which is supporting the recovery of over 500 MSMEs and providing digital business training to more than 16,000 entrepreneurs. Together, these efforts aim to restore economic activity and strengthen long-term resilience in earthquake-affected communities.
Overall, the Credit Guarantee Facility represents a catalytic financing approach that uses concessional capital to reduce investment risk in fragile contexts, enabling financial institutions to continue lending when conventional systems are under strain. It reflects a broader strategy to support inclusive recovery by unlocking private sector finance and rebuilding livelihoods in Myanmar’s most vulnerable regions.
