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MBF signs K2 billion funding agreement with Yoma Bank

Mahar Bawga Finance (MBF), a Myanmar non-banking finance institution (NBFI), and Yoma Bank last Friday signed a semi-collateralised funding agreement under which Yoma will provide MBF with K2.2 billion in funds to support its operations.

The agreement, which aims to address growing borrower demand for unsecured loans for personal or business development, could see MFB adding up to 5000 new customers to its client base.

Since starting operations in 2014, MBF has more than 14,000 clients in Yangon and now has an aggregate loan book totaling K4.59 billion.

The semi-collaterised agreement supporting NBFIs is a first for Yoma Bank in its drive to bring the unbanked population of Myanmar into the formal financial system. The bank believes the agreement will not only be mutual beneficial for those involved, but also to consumers by improving the level of their borrowing behavior and financial literacy.

“This partnership highlights our ongoing commitment as Myanmar’s largest provider of liquidity to Myanmar’s MFIs and NBFIs. As we start a new year Yoma Bank has provided K75.7 billion of financing to 10 MFIs since pioneering this structure,” Hal Bosher, CEO of Yoma Bank, said in February 1 statement.

At present, MBF is providing various types of loans and financing programs such as automobile and mortgage collateralised lending, leasing and consumer financing targeted to white-collar workers in Myanmar. Around 85 percent of MBF’s loan book is consumer financing.

The head office of MBF is currently located in Sanchaung township and there are plans to open a new branch in Yangon in the near future.

MBF is the first NBFI in Myanmar funded indirectly by the International Finance Corporation (IFC) to inject more money in non-banking sector in Myanmar through Yoma Bank, which is IFC’s first direct investment in Myanmar.

In addition, MBF is also planning to launch product financing soon in market to achieve the target of 5-7 billion market in non-durable products financing.

According to Katsunori Aita, vice president of MBF, the company has already planned for four branches in this year to expand its operations.

The first branch will open this month in South Okkalapa, with business of two billion targeted for each branch by the end December.

SOURCE: MYANMAR TIMES

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