Advans and Yoma Bank signed three financial agreements for microfinance funding to provide micro-loans to over 2,000 new families in Mandalay and Sagaing Regions

Over the course of March 2018, Advans Myanmar and Yoma Bank closed three financial transactions. The deals included two cross-currency swaps for USD 700,000 and a back-to-back term loan of MMK 1,000,000,000. Both the swaps and the back-to-back term loan allowed Advans to fully hedge the exchange rate risk on their overseas borrowings and provide them with local currency funding to grow the micro-finance business. The new funds are estimated to provide micro-loans to over 2,000 new families in the Mandalay and Sagaing Regions.

Jana Chmelnizki Kadian, the Managing Director of Advans Myanmar said, “We are glad that after only one year of operation we are able to expand our relationship Yoma Bank as our first local lender. The Yoma team has been remarkably professional, and has shown full support for Advans Myanmar’s mission of providing easily accessible, fair and sustainable financial services to underbanked clients in Myanmar - in order to strengthen local businesses, create and sustain jobs and improve clients’ living standards.”

The cross-currency swap, executed by Yoma Bank’s Treasury, is the first of its kind between Yoma Bank and a micro-finance institution. According to Daw Zin Mie, Yoma Bank’s Head of Treasury, the swap “is one of the hedging products that Yoma Bank has developed and introduced to the MFI community during the last few months. Our hedging products have generated considerable interest and we hope that this is the first of many transactions to come. This is yet another step in providing fit for purpose products and solutions for our clients.”

Like the currency swap, Yoma Bank’s back-to-back term loan provides hedging solutions against FX fluctuations. Although it was only introduced to the market in late 2017, because of the additional advantages that the product provides, the semi-secured loan product generated a lot of interest. Teun van Vlerken, Credit Risk Consultant with Yoma Bank under the LIFT-supported Agribusiness Finance Program said: “The professionalism and ambition that underpin Advans’ business plan has been instrumental in our decision to lend on a partially unsecured basis. Innovative funding solutions like Yoma Bank’s back-to-back loan allow MFIs to attract funding without the need to commit fixed asset collateral typically required by banks."

(Myanmar Business Today: https://www.mmbiztoday.com/articles/advans-and-yoma-bank-ink-three-financial-agreements-microfinance-funding-activities )

​