Fullerton Finance (Myanmar) Company Limited, a licensed microfinance company in Myanmar, announced that IFC, a member of the World Bank Group, has made a $1.2 million equity investment in the company to help the microfinance provider expand lending to smaller businesses and individual borrowers.
Myanmar’s financial system is in an early stage of development. Just 30 percent of Myanmar’s adult population has access to formal financial services. The growth financing demands from micro, small, and medium enterprises (MSMEs) remain high, as access to affordable long-term non-collateralized loans are extremely limited, according to IFC.
IFC’s funding will help Fullerton Myanmar address these financial gaps by extending more loans and providing responsible financial services to low-income borrowers and small businesses.
Established in 2014, Fullerton Myanmar serves MSME customers through branches located in the 3 regions of Yangon, Ayerwaddy and Mandalay. The company runs a dual urban/rural microfinance program through an innovative use of technology in the field to improve productivity and turnaround time. It aims to grow its customer base 20 fold from 10,000 customers to 200,000 customers by 2021.
“We welcome IFC’s investment as Fullerton Myanmar continues its strong growth momentum. As we build a sustainable business, we are looking to help our customers grow their own enterprises. Fullerton Myanmar remains focused on adopting industry best practices and using modern technology to efficiently reach urban and rural customers in Myanmar,” said Gan Chee Yen, CEO of Fullerton Financial Holdings.
As the majority shareholder of FFMCL, Fullerton Financial Holdings (“FFH”) brings about capital, management experience, knowledge and technical knowhow and human capital development to FFMCL. Through working with local partners, FFH aims to increase financial inclusion and improve credit access across countries that it operates in.
Capital Diamond Star Group (“CDSG”), the other shareholder in Fullerton Myanmar, is one of Myanmar’s most respected and prominent conglomerates. In addition to participating as an equity investor in FFMCL, CDSG will also leverage its extensive local network and know-how to advance FFMCL’s objectives.
“CDSG is very pleased to welcome IFC as a partner in FFMCL,” said U Ko Ko Gyi, Managing Director of Capital Diamond Star Group (“CDSG”). “It is our intention that FFMCL will encourage and support grass-roots level entrepreneurship and bring prosperity to Myanmar,” he added.
As an industry leader in responsible microfinance, IFC works with more than 100 institutions in over 60 countries. Since pioneering commercial microfinance in the early 1990s, IFC has continued to lead innovation in microfinance, using developments in technology, financial products, and policy to help financial institutions provide accessible financial services.
“It is important for microfinance institutions to be well capitalized, creating a strong foundation for the necessary investment in risk management systems, staff, and product development in order to provide a full menu of products and services to underserved segments of the market,” said Marcos Brujis, IFC Global Director for Financial Institutions Group.
This is a second investment IFC made in a green-field microfinance institution. These long-term commitments highlight the World Bank Group’s support for Myanmar’s goal of increasing financial inclusion from 30 percent in 2014 to 70 percent by 2020. Globally, the World Bank Group’s universal Financial Access Initiative works to expand access to one billion of the world’s unbanked by 2020, seeing microfinance as key to ensuring that people worldwide have sustainable and affordable means to manage their financial lives.
IFC, together with the World Bank, is supporting reforms and investments in Myanmar to strengthen the private sector and create jobs to reduce poverty and boost shared prosperity. IFC is working with the government and the private sector to improve the country’s investment climate, access to finance, and infrastructure, with an initial focus on the power and telecommunications sectors.