Exclusive: Myanmar-focused PE Delta Capital closes $7m funding in Easy Microfinance

Photo: Juliet Shwe Gaung. Myanmar Currency.

Yangon-based private equity firm Delta Capital Myanmar has invested $7 million in Meridian Capital-backed Easy Microfinance, the companies announced in a statement on March 13.

The investment will see Delta Capital take a significant minority stake in Easy Microfinance, which provides micro-credit to families and entrepreneurs in Myanmar in need of formal credit. This will be Delta Capital’s first direct investment in the financial services sector in Myanmar.

Easy Microfinance, which has about $10 million in loan book and over 55,000 clients, will use Delta Capital’s investment to expand its branch network and loan portfolio.

“Easy is an innovative MFI that is poised to benefit from improving regulatory, funding and operating environments. We are proud to partner with its founding shareholder, Meridian Capital, and Easy’s strong management team to support the company’s long-term growth,” said Nick Powell, Managing Partner of Delta Capital.

The investment into Easy Microfinance comes a little over a year after it received a licence as a foreign microfinance institution to work in Myanmar.

Delta Capital, with over $110 million in assets under management, aims to provide growth capital to leading entrepreneurs and businesses across key growth sectors in Myanmar.

The investment was made from Delta Capital’s Myanmar Opportunities Fund II, a $100-million fund that is currently on the road for fundraising. Fund II had reached about $50 million in commitments by late 2017 and has made two investments.

“Delta Capital is not only bringing additional capital. Through its knowledge and network, Delta Capital will also help us build relationships with potential partners and mobilize additional funding, which will enable Easy to support more small businesses across regions in Myanmar, and have a significant impact on financial inclusion in the country,” said Nodir Normatov and Frank Snieders, board director and managing director of Easy.

Easy’s ticket size for group loans ranges between K100,000 ($74.6) to K1 million ($746.2) per member (5 to 10 member) and for individual loans, falls in the range of K1 million ($746.2) to K10 million ($7462.6). A service fee of 2 per cent of the loan amount and an interest rate of 2.5 per cent is levied on the remaining balance.

In Myanmar, there are over 250 MFIs and Easy claims that it is among the top 10 commercial MFIs in the sector.  “The microfinance sector is expected to play a key role in providing access to funding to micro, small and medium-sized enterprises in Myanmar – a strategic priority of the Government,” said Powell.

Set up by Meridian Capital, an international private equity investment group with interest in food and beverages, transportation, real estate, natural resources and financial services sectors, Easy currently operates across Yangon Region and Mon State offering group and individual business loans without the need of collaterals but aimed for those who have already established own businesses.

Prior to the investment round, Delta Capital had raised a $50-million Myanmar Opportunities Fund I in 2013. It has made five investments in the areas of IT, beverage packaging and distribution, beverage packaging manufacturing, oil and gas and in a local business conglomerate. The firm has also made a partial exit out of Fund I but did not elaborate more.

During an interaction with DEALSTREETASIA in June 2017, Powell had said, fundraising for the Myanmar Opportunities Fund II has attracted interests from European family offices and wealthy Asian families.

Also Read:

Myanmar-focused PE Delta Capital to close $50m for second fund by July

Exclusive: IFC to extend $21m debt to half a dozen MFIs in Myanmar

Myanmar: Group Lease enters financial service JV with Aung Moe Kyaw

 

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.