“Strong CSR says, ‘do good for people and the planet, as long as you can do so without sacrificing profits’,” said Muhammad Yunus, Founder of Grameen Bank. In 1970, when Yunus provided credit to the poorest of the poor in rural Bangladesh without any collateral, it led to the emergence of microfinance institutions (MFIs), especially in developing and emerging economies. Hayman Microfinance (Hayman), which provided financial solutions to the low-income strata and rural population of Myanmar, who had limited or no access to banking services, was one such MFI.

Established in 2014, Hayman entered Myanmar in the early stages of the economy opening up. It was one of the 17 MFIs granted a license by the Myanmar government to operate as a loan and deposit-taking microfinance organisation. Hayman grew rapidly and by March 2020, it had become a 25-branch strong company with a loan portfolio of US$29 million, 129,000 active borrowers, and 155,000 depositors. Sultan Marenov, Executive Chairman and Managing Director of Hayman, believed that one of the key contributing factors to Hayman’s growth trajectory was its CSR efforts.

“Our CSR engagement was important to show our commitment to the regulator - that we understand the needs of the country, and we are here beyond business opportunity. That is why CSR policy was the first SOP of our company,” commented Marenov.

From the onset, Hayman incorporated CSR as an integral part of its working document and business model. It set up a dedicated department, Social Performance Management Department (SPMD), with two full-time resources to oversee the planning and implementation of all its community welfare initiatives. It also actively collaborated with many organisations and individuals to support CSR activities in the areas of health, education, safety, and environment. Hayman’s approach towards its CSR obligations went beyond what was mandated by the Myanmar government and its shareholders, having established SPMD with the same diligence and accountability as its commercial operations. This paid off well in creating goodwill and earning the company much needed credibility among the locals, particularly the underprivileged section of the society—the primary target market for microfinance.

“It helped us build trust in our relationship with the local communities. Today, we are an entity they recognise, and are open to working with. Especially as a deposit-taking MFI, trust and brand recognition are a must to help clients’ gain confidence in depositing their savings with us,” said Siegfried Kofi Gbadago, CFO.

Not only did Hayman understand its rural clients’ needs well, it also practised a pro-active approach to building a strong relationship with the government authorities. In February 2020, in light of the Covid-19 pandemic, Hayman called for a group meeting, comprising MFIs operating in the region and the Myanmar authorities, to discuss the potential impact of the contagion and propose collaborative measures to protect the community.

“Unlike some of the other MFIs who used the forum to demand support from the government, we offered support through our CSR activities to help our clients and the community at such a time,” said Marenov. “As the entire industry and the regulators were there at the meeting, our stand differentiated Hayman and positioned it favourably in the eyes of the government.”

Set in November 2020, this case is written by Heli Wang, Dean, Postgraduate Research Programmes at Singapore Management University (SMU) and Sheetal Mittal from the Centre for Management Practice (CMP) at SMU. The case examines the attractiveness of the microfinance industry in an under-developed market, and the role played by different stakeholders. In addition, the case evaluates the potential of CSR as a core element of a company’s business model and as a key resource for creating sustainable competitive advantage.

To read the case in full, please visit the CMP website by clicking here.