Myanmar Finance International Limited (MFIL), a microfinance joint venture of AIM listed Myanmar Investments International (MIL), has raised an additional local currency denominated $1 million debt facility from Malaysia’s Maybank. The loan agreement was signed on May 3, according to their announcement. This will be a follow-on debt injection from Maybank after the MFI secured $1 million back in November 2016.
“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. 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,” said Aung Htun, managing director of MIL.
MFIL is a joint venture between MIL (37.5%), Myanmar Finance Company Limited (37.5 percent) and the Norwegian Investment Fund for Developing Countries (Norfund), which owns 25 per cent, with total paid up capital of nearly $5 million.
The loan portfolio of MFIL has also increased at a compound annual growth rate of 78 percent for the number of borrowers, reaching 42,000 as of February 2017. The amount of loan disbursed has reached K7.8 billion ($5.7 million) by February 2017, a 148 percent growth rate since its initial investment in September 2014. The loan size has also increased at MFIL, reaching K183,000, an increase from K80,000, it stated.
It supports small businesses such as cultivation of vegetables and flowers, production of handicrafts, woodwork furnishings and various plastic products.
A recent loan provided by Maybank to the microfinance sector in Myanmar is a $1 million debt to Hayman Capital, a deposit taking microfinance institution from Myanmar backed by Singapore-based investment company, Hayman Capital Pte Ltd. MIL’s investments outside MFIL is in Apollo Towers, with a 9.3 percent shareholding. In April.
MIL also recently announced an equity capital fundraising to fund the pipeline investments in the healthcare, retail, mobile financial services, education and agricultural sectors.