Life-changing Credit

The Singaporean CEO of digital micro-financing firm Get helps alleviate poverty in Myanmar.

BY ALYWIN CHEW
 

A

fter Leon Qiu, 34, made a work trip to Yangon in 2017, he returned to Singapore with more than just the name cards of wealthy people he was trying to attract to his bank.

The then private banker also experienced a life-changing epiphany that would alter his course in life. The trigger? Witnessing the living conditions of the Myanmarese, one in four of whom are still stricken by poverty.

“The trip gave me a better perspective on life. On one hand, I had clients who were blessed with more than they needed, and on the other, there were people who stuggled with even the basic necessities,” he says. Later that year, driven by a burgeoning desire to learn more about the needy in society, he attended an event organised by Homeless Hearts of Singapore, where he got to befriend homeless individuals.

Qiu admits that he used to think that poverty or homelessness was a result of poor life decisions. Meeting homeless individuals, however, taught him that the circumstances are, in reality, much more complex.

Singaporean entrepreneur Leon Qiu (centre) with rural Myanmar community members who have benefitted economically from the digital microfinancing loans offered by Get.

“It’s judgemental for anyone to attribute someone’s difficult circumstance to one’s own folly,” he says.

These reflections informed his decision to make a career switch – from helping the rich get richer to freeing the poor from the shackles of poverty.

BANKING ON THE DIGITAL ECONOMY
In 2019, Qiu set up Daung Capital, providing unbanked Myanmar people with access to credit they would never be able to obtain through traditional banks.

Furthermore, the interest rates charged are significantly lower than those at banks. Daung Capital has three key offerings: cash advance distribution, education financing, and providing credit so that people can procure motorcycles – an important source of livelihood in Myanmar.

“The locals use the motorcycle in all sorts of fashion, from short-distance transportation and accessing jobs further away to making modifications so that they can carry agriculture products. I have observed how our borrowers have increased their incomes or generated new businesses just by using a motorcycle,” he says.

“WE PROVIDE A MORE RELIABLE AND LOWER COST OF FUNDING FOR THE FINANCIALLY EXCLUDED WHO NO LONGER HAVE TO TURN TO LOAN SHARKS OR PERPETUALLY OPERATE IN A SCARCITY TRAP,” SAYS LEON QIU, FOUNDER OF DAUNG CAPITAL. ”

Most of the preparation work that he had to do was performing extensive research on Myanmar, its culture and business landscape. When operations commenced, the same aspects proved to be the key obstacles. One example Qiu cites was that people could not perform inter-bank transfers online. The only way to overcome this was doing things the “old school” way – manually withdrawing money from one bank before depositing it in another.

Qiu navigated Myanmar’s business landscape as well as its cultural complexities to launch Daung Capital in 2019, which was acquired by local e-commerce platform Get earlier this year.

“Once I had to withdraw S$300,000 from the bank. Because the largest denomination for the Myanmar kyat is 10,000, which is just S$10, I ended up with three trolleys filled with bricks of cash! Whenever this happens, all I can do is cautiously wheel the money over to the other bank with the help of the local bank staff, and hope that the cash is not stolen while in transit,” says Qiu.

Another key challenge was determining the credit worthiness of his customers through interview sessions. For this, he depends on his local staff to bridge the language divide. “While it is a disadvantage not being able to converse in Myanmarese, language is just one element of communication,” he explains.

“For instance, we often talk to motorcycle dealers who are our business counterparts. When a credit assessment is made to determine whether or not a dealer has the positive traits that we are looking for in a partner, it is important to take everything being said with a pinch of salt. The local credit team has done well to analyse consistencies in answers from motorcycle dealers on variations of the same question.”

Qiu also had to fight his own misconceptions about the locals. He admits that he initially thought they needed much hand-holding in their day-to-day tasks, and that good talent was hard to find.

The Singaporean team worked closely with the firm’s Myanmar-based employees to set international business practices.

But the meteoric rise of Daung Capital proved to be a testament to the quality of talent in Myanmar. Just months after Daung Capital was established, the microfinancing firm had amassed a clientele of 3,500 people. Less than a year later, in February 2020, the startup was acquired by Get, a local digital commerce platform.

Qiu singles out Tin Nilar Win, the general manager of Get Mandalay, as an example. “She might be a petite, quiet lady but she runs an efficient operation across Myanmar in terms of collection of motorcycles in the event of fraud or deep default. This is not something that you learn at school,” he says.

The acquisition of Daung Capital, says Qiu, has helped his company achieve a “quantum leap” in functions such as credit assessment and loan monitoring. Besides micro loans, Get also offers a point-of-sale machine that local businesses can use to conveniently offer products and services such as air and bus tickets, hotel stays and mobile top-ups.

Getting acquired has also boosted the reach of his company. Daung Capital has already managed to disburse more than S$7million worth of credit to over 10,000 borrowers.

“If you look at a village that has exposure to micro-financing versus one that does not, the standard in living is apparent. Firms like ours provide a more reliable and lower cost of funding for the financially excluded who no longer have to turn to loan sharks or perpetually operate in a scarcity trap.”

Tin can attest to how Get has been a boon for many of her compatriots. “Get builds the digital infrastructure required for economic inclusion, raising the livelihoods of people, and elevating them from the base of the pyramid. People can start a business with very low investment and raise their income,” she says. “As Daung Capital, we helped many motorcycle taxi drivers own a vehicle through small daily payments over a period of time. Some of these taxi drivers can use our ride-hailing app to boost their income.”

“OUR SINGAPOREAN MANAGEMENT TEAM HAS HELPED US ALIGN OUR WAYS WITH INTERNATIONAL STANDARDS SO THAT PROCESSES AND PROCEDURES CAN BE MORE SYSTEMATIC AND EFFICIENT,” SAYS GET MANDALAY’S GENERAL MANAGER TIN NILAR WIN. ”

Working alongside Singaporeans has been an eye-opening experience so far, Tin adds. “Our Singaporean management has helped us align our ways with international standards so that processes and procedures can be more systematic and efficient. I’ve also learnt that Singaporeans are humble, detail-oriented and passionate about their work. They also take good care of their staff, providing opportunities for self-improvement and life-long learning.”

EXISTENTIAL REFLECTIONS
Similarly, Qiu reflects on the invaluable lessons he has learnt from his colleagues in Myanmar. “From the smallest achievements to doing something out of the ordinary like a company-sponsored event, there is this spirit of celebration among the locals,” he says.

Get also offers education finance to underserved local communities to help them access better opportunities.

Though the ability to find contentment is inspiring, he has no intention to jam on the brakes and smell the roses. In fact, he says that making money is top of the agenda, and it’s not simply because he had to go nearly a year without income.

“I want to earn money so that I can share it with those who need it,” he says. “I do not think I will ever be content. It is the lack of satisfaction that pushes me to do more.”



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