Swiss form Symbiotics SA has made USD$ 2 million investment for a major microfinance fund to raise the latter’s debt capital and reach out to more clients in Myanmar

A Geneva-based company has made a US$2 million investment for a major microfinance fund in Myanmar.

Swiss firm Symbiotics SA on February 5 signed a term loan with Hayman Capital, a microfinance institution (MFI) under Singapore’s International Investment Company, to raise the latter’s debt capital and reach out to more clients in Myanmar.

Hayman Capital is a Myanmar-focused deposit-taking MFI established in 2014. It currently has more than 71,000 active customers, the company said in a statement. The total assets are disclosed at $18.05 million and equity at $10.61 million, with a 0.41 percent of having a portfolio at risk.

The firm said that it will be targeting 15,000 new clients within the niche market “at the lower level”, comprising of trading, production, agriculture and service categories and appropriate for a loan of K200,000 or less.

The signing, approved by the Central Bank of Myanmar and the finance ministry’s Financial Regulatory Department (FRD), has opened doors for Hayman and its customers, said CEO Sultan Marenov. He said the company is committed to reach out to the unbanked population and provide competitive financial services.

As of October 2018, MFIs in Myanmar have been servicing up to 40pc (4.36 million out of 10.89 million) of Myanmar households, according to FRD’s report.

“In other words, 60pc of households from the said categories/ sectors are being unserved by the MFIs. Hayman realises that there is a big gap between the supply and demand side,” Mr Marenov told The Myanmar Times.

Since the enactment of the 2011 Microfinance Law, there are 176 foreign and domestic MFIs in Myanmar, servicing about 70pc of the population which does not have access to formal financial services - they have collectively lent more than K3.9 trillion to 3 million borrowers, according to FRD. In 2016, new regulations were enacted which permitted domestic MFIs to borrow from local or international banks. From then and onwards, they began raising money from banks such as Yoma Bank which has financed a total of K75.7 billion ($50.2 million) to 10 microfinance firms to date.

The Microfinance Law led to the emergence of MFIs in the country. But challenges exist. For example, many clients ended up further in debt because MFIs tend to be crowded within a single area, so it is not uncommon for three institutions to have lent to the same borrower.

(The Myanmar Times: https://www.mmtimes.com/news/swiss-investor-backs-myanmar-microfinance-fund.html )

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