Vietnam’s investment firm Dragon Capital has forged a joint venture with Myanmar-based Ruby Financial Company to provide microfinance services in the frontier market.
Loi Hein Group’s Ruby Hill Financial will hold a majority stake of 51 per cent in the JV, while Dragon Capital will own the rest.
The JV, Ruby Hill Microfinance, will start operations with an initial capital of $5 million to offer inclusive loan products and services to the burgeoning workforce in Myanmar, Dragon Capital said in an announcement on April 5.
Sai Sam Htun, chairman of Loi Hein, and Dominic Scriven, chairman of Dragon Capital, will jointly chart out the strategic business course for Ruby Hill Microfinance, while Loi Hein’s chief strategy officer Trinh Proctor has been appointed as CEO of the microfinance institution.
Dragon Capital is the earliest investment fund in Vietnam, managing $1.5 billion assets in public and private equities, fixed income and property. It has a strong track record in working with the finance sector in Indochina.
It recently exited Cambodia’s microfinance unit PRASAC to LOLC International Private Limited and Bank of East Asia. The firm had invested in PRASAC since 2006.
Meanwhile, Loi Hein, as Myanmar’s leading consumer discretionary group, has been diversifying into the finance service industry with the establishment of Ruby Hill Financial and KTZ Ruby Hill Securities, a partnership with Thailand’s KT ZMICO.
The regional expertise of Dragon Capital, combined with Loi Hein’s local knowledge, is expected to help the JV better tap the unbanked and underbanked community of Myanmar, which accounts for 80 per cent of the population. The unmet financing demand in the country is estimated at $1 billion.