IFC becomes first in­ter­na­tional in­vestor in a commercial bank in Myan­mar

Mizzima Business Weekly - - CONTENTS -

IFC, a mem­ber of the World Bank Group, has con­verted its loan pro­vided in 2014 to 5% eq­uity share­hold­ing to Yoma Bank Lim­ited, one of the largest banks in Myan­mar. With this con­ver­sion, IFC becomes the first in­ter­na­tional in­vestor in a commercial bank in Myan­mar. This marks an im­por­tant mile­stone in the coun­try’s bank­ing sec­tor, boost­ing for­eign di­rect in­vest­ment in Myan­mar, ac­cord­ing to a press re­lease.

In 2014, IFC pro­vided a loan pack­age to Yoma Bank to help it ex­pand lend­ing to small and medium en­ter­prises (SMEs). SMEs play a cen­tral role in Myan­mar’s econ­omy. Ap­prox­i­mately 99.4 per­cent of all busi­nesses in Myan­mar are clas­si­fied as SMEs, con­tribut­ing to 50 per­cent of job cre­ation. Yet, this sec­tor is in ur­gent need of fi­nanc­ing to grow and create more em­ploy­ment op­por­tu­ni­ties. This lack of fi­nanc­ing af­fects Myan­mar’s key sub-sec­tors in­clud­ing man­u­fac­tur­ing, re­tail, and ser­vices. Since its ini­tial en­gage­ment with Yoma Bank, IFC has sup­ported the Bank in a num­ber of ar­eas in­clud­ing credit risk man­age­ment, cor­po­rate gov­er­nance, fi­nance, trea­sury, and prod­uct de­vel­op­ment. IFC also helped the Bank im­ple­ment a new core bank­ing sys­tem. This con­trib­uted to its trans­for­ma­tion into a com­pet­i­tive fi­nan­cial in­sti­tu­tion op­er­at­ing in line with global best prac­tices and stan­dards — bet­ter serv­ing Myan­mar’s un- and un­der-banked pop­u­la­tion. IFC’s in­vest­ment and ad­vi­sory have helped Yoma Bank pro­vide over an ap­prox­i­mate 7000 loans worth ~$800 mil­lion to SMEs in Myan­mar and ex­pand the Bank’s out­reach from 52 branches to 80.

“We are pleased to be the first do­mes­tic bank to accept a for­eign in­vestor as our share­holder. Yoma Bank has part­nered with the In­ter­na­tional Fi­nance Cor­po­ra­tion (IFC) over the past five years im­prov­ing our risk man­age­ment, cor­po­rate gov­er­nance, and au­dit ca­pa­bil­i­ties. We wel­come IFC to our Board of Di­rec­tors and look for­ward to con­tribut­ing fur­ther to the de­vel­op­ment of Myan­mar’s econ­omy,” said Mr. Serge Pun @ U Theim Wai, Ex­ec­u­tive Chair­man of Yoma Bank.

“We would like to thank Yoma Bank for be­ing ex­em­plary part­ners. Yoma Bank has fol­lowed global stan­dards of gov­er­nance dili­gently.” said Vikram Ku­mar, IFC Coun­try Man­ager for Myan­mar and Thai­land. He added, “Our in­vest­ment and ad­vi­sory work with Yoma Bank have en­abled many en­ter­prises in Myan­mar to grow their busi­nesses. With our eq­uity stake in Yoma Bank, and long-stand­ing part­ner­ship, we can help the Bank fur­ther ex­pand its prod­uct of­fer­ings and meet the coun­try’s fi­nanc­ing gap.”

IFC’s con­ver­sion from debt to eq­uity in Yoma Bank was ap­proved by the Cen­tral Bank of Myan­mar in Oc­to­ber last year. In align­ment with the gov­ern­ment’s ef­forts, IFC and Yoma Bank sup­port the de­vel­op­ment of Myan­mar’s fi­nan­cial and bank­ing sec­tor as banks are critically im­por­tant in help­ing en­trepreneur­s grow their busi­nesses and con­trib­ute to the coun­try’s eco­nomic growth.

Photo: Yoma Bank

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