Rent 2 Own to offer bike loans in partnership with Shwe Min Gan to boost rural mobility

Rent 2 Own Myanmar Co will partner with Shwe Min Gan Co to provide loans to customers, enabling them to buy their own motorcycles and farming machinery.

Funds totaling US$5 million will be rolled out over the next six months, said Daw Hla Than Yi, director of Shwe Min Gan Co, which obtained a non-bank financial institution license from the Central Bank of Myanmar this month.

“We will target villagers in the more rural regions of the country and leverage on Rent 2 Own’s network in Myanmar to extend the loans,” said Daw Hla Than Yee.

Rent 2 Own rents out motorcycles under the hire-purchase system. Customers pay a deposit of 10 percent of the price and a once-a-month or once-a-quarter rental fee.

Payment contracts are for nine months to three years, with interest. During this term, the bikes must be serviced once every three months. At the end of the contract, renters have the option of returning their motorcycles and claim back the initial 10pc deposit, or take ownership of the vehicle. Around 99pc of renters choose to buy the motorcycles, Rent 2 Own told Myanmar Times in a recent interview.

The additional financing will help a larger pool of customers afford motorcycles, which are essential for people living in rural areas. More than 70 percent of Myanmar people live in villages, and every household needs at least one motorcycle to make it easier and faster to go about their daily lives. But for low-income earners, it is not easy to buy one.

“As Rent 2 Own is providing these services especially for rural families, they will benefit more from our expanded financial services in partnership with Shwe Min Gan,” said Mr. Philippe Lenain, founder and CEO of the company.

Shwe Minn Gan, which is an arm of Rakhine-based Inn Pauk Wa Co, expects to provide additional financing services in Myanmar by forging similar partnerships with other firms besides Rent 2 Own.

Rent 2 Own was founded in 2015 with intial foreign investment of US$10 million (K15.16 billion). It plans to double its number of rentals from 110,000 motorcycles to around 200,000 by the end of this year and extend its service to Chin State and Tanintharyi Region.

Most of its motorcycles are currently rented in Yangon Region, but it also offers rentals in Ayeyarwady Region, Bago Region, Shan State and Mon State. It has increased its investment in Myanmar to $35 million and plans to invest up to 40 million.

In April, Rent 2 Own raised $3 million in debt financing from Incofin CVSO, one of the funds under the management of Belgian impact asset manager Incofin.

Last year, Germany’s development finance institution DEG and agRIF, an impact focused fund for financial intermediaries targeting smallholder farmers and rural people, announced a joint investment of $6 million in Rent 2 Own.

Source: Myanmar Times

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