Today, the International Finance Corporation (IFC) announced its first investment in Myanmar that involves setting up a new microfinance institution to provide loans for 200,000 people – mostly micro and small businesses run by women – by 2020.
Together with German government-owned development bank, KfW, and a subsidiary of the French banking group BRED Banque Populaire, COFIBRED, the IFC will support Cambodia’s ACLEDA Bank Plc in establishing ACLEDA MFI Myanmar Co.
The IFC will lend $2 million to ACLEDA Bank which will be repaid with shares in ACLEDA MFI Myanmar.
Because of decades of isolation, Myanmar is one of the world’s most underdeveloped financial services industries. ACLEDA MFI Myanmar will address significant demand for financing from small and medium enterprises in Myanmar and will begin operations this year.
“Our investment in a microfinance institution is a good start to our support for Myanmar’s economic reforms in order to improve access to finance, create more jobs and reduce poverty for its people,” said Sergio Pimenta, IFC’s director for East Asia and the Pacific, in a release.
“Through ACLEDA MFI Myanmar, IFC will help scale up the country’s microfinance industry and increase access to financial services for both the urban and rural poor. This will help convince other players that affordable microfinance services can be delivered effectively in Myanmar.”
ACLEDA Bank has been partnering with the IFC since 1999 and was Cambodia’s largest microfinance institution. Through this new initiative, the IFC will support ACLEDA Bank in strengthening ACLEDA MFI Myanmar’s capacity in delivering microfinance services, enhancing its risk management practices, and developing a responsible finance strategy.
Over in China, the Shanghai Securities News reported that microfinance firms in the city of Wenzhou will soon be able to borrow and lend with market-based interest rates, as the city expands funding channels in hopes of bringing more private capital to the state-dominated financial sector.
It was also reported that the microfinance firms will be able to borrow and lend based on the Shanghai Interbank Offered Rate through a new refinancing centre. The city is contemplating to allow microfinance firms to sell their equity through the centre and to issue bonds through the existing Zhejiang Equity Exchange.
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