Myanmar’s Yoma links up with Proximity to boost farm loans

YOMA Bank, Myanmar’s fourth-largest bank by assets with more than 3,000 employees and 72 branches across the nation, has signed a funding agreement with Proximity Designs for 7.3 billion kyats (Bt178.5 million), said a bank executive.

Hal Bosher, adviser to the chairman and CEO of Yoma Bank, said the partnership with Proximity Designs, which runs its microfinance business unit, Proximity Finance, would support the extension of credit to Myanmar’s unbanked population, mostly living in rural areas. The funding agreement was signed on Tuesday.

“The development impact of this funding reflects our commitment to support an inclusive financial system and our core value as a responsible bank,” Bosher said.

The practice of a Myanmar bank lending on a semi-secured basis to microfinance companies is unprecedented to date. The funding made available through this pioneering deal enables Proximity Designs to further grow its microfinance business and will enable 28,000 farmers and rural-based entrepreneurs to obtain credit to manage the working capital flow of their respective businesses, he said.

Bosher said earlier the bank would develop credit products for the agriculture sector, in addition to its successful Agribusiness Finance Programme.

The bank actively targets small and medium-sized enterprises in its loan portfolio. More than 70 per cent of its loans have been provided to SMEs with an average loan size of US$175,000. Many of the loans have been made outside of the nation’s commercial hubs such as Yangon and Mandalay.

Savoeung Chann, CEO of Proximity Finance, said the agreement would support the growth of their organisation to a large extent.

“This milestone facility will enable us to increase our reach to 28,000 new farmer households across Myanmar and deliver more affordable products for our clients,” he said.

Proximity Finance keeps a loan book of 20.5 billion kyats and has been providing farm finance to 78,467 households since 2011, benefiting 392,000 people across the nation.

“To date, our small lending programme has covered 1,754 villages in 54 townships in nine states and regions. Regionally, our concentration mainly focuses on the delta and dry zone,” Chann said earlier at an event organised by AmCham Myanmar.

He pledged to produce well-designed value-added products and integrate with Farm Advisory Service and Irrigation.

Proximity Finance has planned to bring innovative financial services to rural areas to create a better future of those living outside major cities. Chann aims to help increase the income of people who earn their living by agriculture.

Source: Myanmar Eleven