IFC, a member of the World Bank Group, has converted its loan provided in 2014 to 5% equity shareholding to Yoma Bank Limited, one of the largest banks in Myanmar. With this conversion, IFC becomes the first international investor in a commercial bank in Myanmar. This marks an important milestone in the country’s banking sector, boosting foreign direct investment in Myanmar, according to a press release.
In 2014, IFC provided a loan package to Yoma Bank to help it expand lending to small and medium enterprises (SMEs). SMEs play a central role in Myanmar’s economy. Approximately 99.4 percent of all businesses in Myanmar are classified as SMEs, contributing to 50 percent of job creation. Yet, this sector is in urgent need of financing to grow and create more employment opportunities. This lack of financing affects Myanmar’s key sub-sectors including manufacturing, retail, and services.
Since its initial engagement with Yoma Bank, IFC has supported the Bank in a number of areas including credit risk management, corporate governance, finance, treasury, and product development. IFC also helped the Bank implement a new core banking system. This contributed to its transformation into a competitive financial institution operating in line with global best practices and standards — better serving Myanmar’s un- and under-banked population. IFC’s investment and advisory have helped Yoma Bank provide over an approximate 7000 loans worth ~$800 million to SMEs in Myanmar and expand the Bank’s outreach from 52 branches to 80.
“We are pleased to be the first domestic bank to accept a foreign investor as our shareholder. Yoma Bank has partnered with the International Finance Corporation (IFC) over the past five years improving our risk management, corporate governance, and audit capabilities. We welcome IFC to our Board of Directors and look forward to contributing further to the development of Myanmar’s economy,” said Mr. Serge Pun @ U Theim Wai, Executive Chairman of Yoma Bank.
“We would like to thank Yoma Bank for being exemplary partners. Yoma Bank has followed global standards of governance diligently.” said Vikram Kumar, IFC Country Manager for Myanmar and Thailand. He added, “Our investment and advisory work with Yoma Bank have enabled many enterprises in Myanmar to grow their businesses. With our equity stake in Yoma Bank, and long-standing partnership, we can help the Bank further expand its product offerings and meet the country’s financing gap.”
IFC’s conversion from debt to equity in Yoma Bank was approved by the Central Bank of Myanmar in October last year. In alignment with the government’s efforts, IFC and Yoma Bank support the development of Myanmar’s financial and banking sector as banks are critically important in helping entrepreneurs grow their businesses and contribute to the country’s economic growth.