World Bank’s IFC agrees to provide Yoma Bank with $5 million convertible loan


By Kyaw The-ein (MNA)
Nay Pyi Taw, 23 Nov — International Finance Corporation (IFC), a member of the World Bank Group, has agreed to provide Yoma Bank Ltd. with a $5 million convertible loan and help the lender improve its risk management and corporate governance in support of the bank’s growth strategy. The package is expected to help Yoma Bank expand lending to small and medium enterprises, a sector of Myanmar’s economy in desperate need of financing to grow and create more jobs.
The loan is the first step in IFC’s financial support for the bank, which may be further increased to up to $30 million in the coming years in the form of equity, senior debt and trade guarantee lines under IFC’s Global Trade Finance Program, which boosts banks’ capacity to provide financing for importers and exporters. The additional support for Yoma Bank will be subject to further due diligence and subsequent approvals from IFC’s management and board.
As Myanmar emerges from years of isolation, the demand for financial services in the country is huge. More than 70 percent of adults do not have formal access to credit, deposit facilities, and other financial services, such as insurance and remittance. Only 5 percent of adults have a bank account in their name.
“It is crucial that small and medium enterprises in Myanmar have access to financial services that allow them to operate and thrive,” said Yoma Bank Executive Chairman and CEO U Theim Wai, also known as Serge Pun. “Yoma Bank is proud to grow its business in partnership with IFC to support SMEs in Myanmar, which are critical for the country’s economic and social development. It is our aim to be a leading SME bank in the country and to contribute toward developing a vibrant SME sector in the country.”
In addition to the loan, IFC will advise Yoma Bank on identifying and installing a core banking system, enhancing its risk management and corporate governance, and developing new products and delivery channels for small and medium enterprises over the next three years. Yoma Bank will also develop policies and procedures to identify and manage environmental and social risks associated with the business activities it finances. IFC’s investment and advisory support is expected to help Yoma Bank provide an additional 1,000 loans worth $370 million to small and medium enterprises in Myanmar by 2019.
“IFC puts a strategic focus on supporting the development of Myanmar’s financial and banking sector as banks are critically important in helping entrepreneurs grow their businesses and contribute to the overall economy,” said Karin Finkelston, IFC’s vice president for Asia Pacific. “IFC supports Yoma Bank and other lenders to develop environmental and social sustainability and standards and governance structures that will help them integrate into the international banking community and better serve the needs of Myanmar’s small and medium enterprises.” Founded in 1993, Yoma Bank is one of Myanmar’s leading fully licensed commercial banks with 2,300 employees and more than 50 branches covering 25 major cities nationwide. It is recognized as one of the most progressive banks in Myanmar and is leading an effort to bring responsible banking to the country with a strong emphasis on good corporate governance and conservative capital-ratio policies. The lender is well positioned to support Myanmar’s continued economic growth. 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 aims to improve the country’s investment climate, access to finance, and infrastructure, with an initial focus on the power and telecommunications sectors.

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