Finland’s development finance institution Finnish Fund for Industrial Cooperation Ltd (Finnfund) said Tuesday it has made a $5.5-million senior loan investment in Early Dawn Microfinance Co., Ltd. (DAWN), the third-largest MFI in Myanmar in terms of client outreach.
This is Finnfund’s third investment in the microfinance sector in Myanmar, one of the poorest countries of Southeast Asia where almost 70 per cent of the population lacks access to formal financial service.
The financing will support DAWN’s expansion in underserved townships and peri-urban areas, according to a statement.
DAWN is registered with the Ministry of Planning, Finance and Industry and operates with a deposit-taking license granted by the Financial Regulatory Department.
The rapidly expanding microfinance market in Myanmar presents interesting opportunities for impact investors like Finnfund.
“Finnfund’s investment supports our vision of becoming the best microfinance institution in Myanmar, improving the lives of the families we serve”, says DAWN CEO Ravi Tissera said. “Thanks to our extensive branch network, we are able to reach even the most vulnerable groups in rural areas.”
“During the pandemic, DAWN acted quickly in mobilising a COVID-19 response team and rolling out a business continuity plan,” Finnfund’s Investment Manager Ulla-Maija Rantapuska said. “They have not only minimised the impact on their business but also limited the disruption to clients’ businesses.”
DAWN has for example created a new product called “Emergency Top-Up Loan” to support clients’ businesses that have been impacted negatively by the pandemic. The company has also rescheduled repayments, provided prepaid loans and set up help desks in response to the pandemic.
DAWN, one of the earliest MFIs established in Myanmar, was originally launched in 2002 as a programme under Save the Children International.
In 2015, Accion International, Dutch development bank FMO, and Triodos Investment Management formed a consortium and invested in DAWN to set it up as an institution that could serve as a model for the country’s nascent microfinance industry.