International Finance Corporation (IFC), the private lending arm of the World Bank, will extend senior debt of $6 million and an equity injection of $1.5 million into Maha Agriculture Public Co ltd, a subsidiary of Myanma Awba Group.
Myanma Awba is a market leader in agrochemical fertilizers in Myanmar, connects to 3 million farmers across the country through its vast network of sales centres and dealers.
The Group, whose primary shareholder is Thadoe Hein, has engaged IFC Advisory Services since November 2015 for business planning and initial development of Maha Agriculture, founded in 2013. Earlier this year, IFC also committed a financing facility of $10 million to Myanma Awba to fuel its expansion in agribusiness as well as microfinance operations.
“The objective of this ongoing phase is to scale Maha’s innovative rural finance business, building on and operationalizing the strategic business plan,” the IFC said in its disclosure. Maha will build on Myanma Awba’s strong brand recognition and customer royalty, it stated.
IFC is also in the process of extending a $21-million debt to about half a dozen of microfinance institutions providing from $3 million to $6 million financing to each MFI as a Kyat denomination loan, DEALSTREETASIA reported earlier.
The support of the long-term local currency financing to Maha is expected to help in its path to establishment and growth, and avoid any currency mismatches, stated IFC.
Business units of Myanma Awba include Myanma Awba Agrochemical, Piti Pyae Sone Co Ltd (logistics), Ayeyarwaddy Seeds, Myanma Awaba Fertilizers, Myanmar Pesticides Industries Co Ltd and the microfinance arm.
Earlier this year, Myanma Awba teamed up with Singapore-based payment service 2C2P for the launch of an over-the-counter cash acceptance service, 1-Stop.
Since the forming of the Myanmar Microfinance Development Programme in 2014, IFC expects to have a financing access to over 270,000 clients though its aggregate loan of over $70 million by 2017.