Myanmar: Microfinance firm MFIL secures $6m loan from Yoma Bank

Old Bagan, Myanmar. Photo by Robert Collins on Unsplash

By Juliet Shwe Gaung

April 25, 2018

Myanmar Finance International Limited (MFIL), a microfinance joint venture company of AIM-listed Myanmar Investments International (MIL), has secured a MMK 8 billion ($6 million) loan from Yoma Bank.

“MFIL will use the loan to further expand its loan portfolio and open new branches in Yangon and Bago,” the company said in its announcement. The proceeds will also be used to roll out its newly launched microfinance loan product.

The security for the loan was given by Norwegian Investment Fund for Developing Countries (Norfund), Triple Jump and Developing World Markets.

“MIL is committed to making investments that are both profitable and also socially transformational. MFIL is not only providing MIL with a great return on capital but has helped to increase the income and opportunities of over 50,000 families. This back-to-back facility led by Norfund will allow MFIL to accelerate its lending,” said Aung Htun, managing director of MIL.

MFIL offers services to nearly 54,000 borrowers in Yangon and Bago, with an aggregate loan book of over MMK 11 billion ($8.29 million).

“Our investment will contribute to economic growth and poverty reduction in Myanmar,” said Fay Chetnakarnkul, head of Asia at Norfund.

The debt support comes about a year after MFIL secured a $1-million loan from Symbiotics SA, a firm that provides investment advisory and portfolio management services.

MFIL is a joint venture between MIL, Myanmar Finance Company and Norfund with a total paid-up capital of about $6 million.

MIL’s contribution in MFIL started in 2014 with a $2-million investment in MFIL. The following year, the microfinance firm welcomed Norfund as an investor with an investment of $1.4 million.

MIL and Myanmar Finance Company now hold a 37.5 per cent stake each, while Norfund owns 25 per cent.

Having an intention to get long-term debt facilities, MFIL did receive 1 million loan from Malaysia’s Maybank in November 2016 and another $1 million follow-on investment seven months later from Maybank.

Yoma Bank has previously provided $2.6-million financing to Maha Agriculture Public Co Ltd, a subsidiary of Myanmar Awba Group. Last month, the bank also extended MMK 800-million ($596,000) funding support to Mandalay Coffee Group, a follow-on to its previous loan of K160 million.

“Specifically, our role in hedging foreign exchange risk and providing additional liquidity to MFIs greatly increases their impact in the local community,” said Hal Bosher, advisor to the chairman and CEO of Yoma Bank.

Previous investments made by MIL include a $21-million investment in Apollo towers for a 9.3 per cent stake and a $495,000 investment (49 per cent stake) in a pharmacy, healthcare and personal care joint venture in Myanmar. In 2017, MIL also formed a joint venture company, Myanmar Voyages Holding Company Limited together with local entrepreneurs, Thet Lwin Toh and Lwin Lwin Kyaw, to make investments in tourism-related assets.

Also Read:

Myanmar Digest: AIM-listed MIL forges tourism JV; Kempinski Yangon aims for Feb 2018 soft opening

Mandalay Coffee Group secures $596K loan from Yoma Bank

Myanmar: Investment firm MIL explores listing on Asian bourse, two new deals

 

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

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