The Effects of the PACT Microfinance Program in the Dry Zone Area of Central Myanmar

Microfinance (MF) has developed as a vital move towards the promotion of community development and poverty alleviation goals through the provision of small loans to low income individuals, households and enterprises. MF for poor people has become an increasingly against poverty in developing countries worldwide. Reducing the proportion of people living on less than a dollar per day by half by 20015 is a part of the Millennium Development Goals. This study examined the effects of the Private Agency Collaborating Together (PACT) microfinance program in Dry Zone Area of Central Myanmar. The Research has been carried out in six villages of Dry-Zone Area in central Myanmar. The analysis uses 2008 cross-sectional survey data on 162 randomly selected households. Descriptive analysis shows that the respondents who participated (clients) are improving of their living standard and more total income than those who did not participate (non-clients) in the program. The result from logistic regression model suggests that marital status of respondents, gender of household head, education level, number of crops, changes farming practices and established new business are strongly associated with taking loan and the presence of these variables increases the probability of being taken loan. Household size, age of respondents and land holding size are also highly significant variables but having negative impact on the probability of taking loan. Therefore, MF program helps client households to reduce their financial vulnerability through diversification of income sources