The International Finance Corporation (IFC), a member of the World Bank Group, has proposed a $30 million commitment in a risk-sharing facility for a portfolio of loans to SMEs and very small enterprises (VSEs) to be originated by Myanmar’s Yoma Bank Limited.
IFC, which holds a 5.1-per cent stake in the bank, said the risk-sharing facility involves a portfolio of up to $60 million, with the IFC and the bank equally sharing the risk of the underlying portfolio. About 35 per cent of the loans are being targeted at women-owned or managed SMEs or VSEs.
The project, according to a disclosure, is part of IFC’s Small Loan Guarantee Program (SLGP) and is supported by a facility created by the World Bank Group to catalyse private sector investment in international development association (IDA) countries.
The risk-sharing facility is also supported by the Women Entrepreneurs Finance Initiative, a collaborative partnership among 14 governments, six multilateral development banks (MDBs), and other public and private sector stakeholders, hosted by the World Bank Group
“IFC anticipates that this project will provide the bank with an efficient risk mitigation tool that will support it to sustainably increase financing to SMEs and VSEs, including women-owned enterprises,” the international lender said.
In Myanmar, SMEs and VSEs represent over 90 per cent of the total officially registered businesses and contribute about 80 per cent to employment, thus presenting a strategic importance for job creation and the country’s economic growth, the IFC added.
Yoma Bank, the fifth-largest private bank in Myanmar in terms of outstanding loans and total assets, is majority-owned by First Myanmar Investment Public Company Limited, which has a 48.4-per cent shareholding, and Yangon Land, which holds a 34.5-per cent stake. Singapore’s GIC is the third-largest shareholder with an equity stake of 8.2 per cent.
IFC acquired a 5.1-per cent stake in the bank after converting a $5-million 2014 loan provided to Yoma Bank into equity.