Myanmar Finance International (MFIL), the mircrofinance joint venture of investment company Myanmar Investments International (MIL), has secured a $1 million loan off Malaysian lender Maybank.
The funds will see MFIL try to grow its outreach from 42,000 customers and expand its loan portfolio, which stood at $5.7 million as of February, said a company press release.
“This is the second in a series of debt financing initiatives that are planned for MFIL in the near term, allowing MFIL to continue to consolidate its position as one of the leading microfinance operators in Myanmar,” said Aung Htun, MIL’s Managing Director.
“For the past two years, MFIL has had no non-performing loans and its profits have consistently grown. This additional leverage enhances profitability and return on equity,” he added.
This is MFIL’s latest cash injection since it secured a $1 million loan off Maybank in November 2016 and brings the microfinance institution’s (MFIs) total paid up capital to nearly $5 million.
In the two years since MIL’s initial investment, MFIL has experienced a compound annual growth rate of 78 percent and 149 percent respectively while its average loan size has risen 129 percent to K183,000, or about $135, in the same period.
Recent liberalisations to Myanmar’s microfinance sector has given both local and foreign MFIs more flexibility in how they secure funding.
But while the highly regulated and risk averse foreign banks based in Myanmar remain cautious about lending to FMIs, Maybank, the only Malaysian bank granted a licence to operate in Myanmar, is playing benefactor to the fledgling sector.
Earlier this year the bank granted $1 million loan to Hayman Capital, a Singapore backed deposit-taking MFI, operating in Myanmar.
MIL and Myanmar Finance Company both hold 37.5 percent stakes in MFIL while Norfund, a Norwegian state-owned investment fund, holds the rest.
MIL, which is listed on the London Stock Exchange, has a $21 million 9.3 percent shareholding stake in Apollo Towers, one of Myanmar’s largest phone tower companies.
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