Myanmar Investments International Limited (MIL), the Myanmar-focused investment company listed on the AIM market of the London Stock Exchange, has announced that the Norwegian Investment Fund (Norfund) has come in as an investor in its microfinance joint venture firm, Myanmar Finance International Ltd (MFIL).
Norfund, the Norwegian development finance institution, will take 25 per cent equity interest in the microfinance venture, in which Myanmar Investments and JV partner Myanmar Finance Co Ltd own 37.5 per cent each.
Norfund will be investing a sum of $1.4 million in the microfinance entity for the 25 per cent interest.
MFIL, formed in 2014, provides microfinance products to local communities in Yangon and Bago. As of 30 September 2015, MFIL has five branches, with over 21,000 clients and an outstanding loan portfolio of over Kyat 3,325 million ($2.6 million at current exchange rates).
MFIL intends to secure long-term debt facilities to leverage its business and Norfund’s participation as a shareholder and its connections with well-established microfinance lenders will greatly assist in this, according to a press release.
MIL will consider making additional equity contributions to MFIL in future.
MIL Managing Director Aung Htun said, “Norfund is an experienced investor in microfinance businesses in developing countries where they provide both equity and debt financing. We are delighted that Norfund is joining us as co-investors in MFIL.”
Norfund’s Managing Director Kjell Roland said, “We are impressed with MFIL’s progress and are looking forward to being an active shareholder in MFIL. Microfinance is a cornerstone of Norfund’s investments in financial institutions in developing countries. Provision of financial services to low‐income individuals and micro, small and medium sized enterprises that otherwise would have little or no means of access to capital is essential for enabling economic growth and poverty reduction in Myanmar.”
Norfund’s investment is subject to closing conditions.
Myanmar Investments International made its first investment in 2014 in MFIL. In July 2015, the company led a $30-million investment in Apollo Towers Pte Ltd, a telecom tower company.
So far, MIL has raised capital of $30 million. The company’s objective is to invest in a diversified portfolio of Myanmar businesses.