IFC to invest US$1.2m in Fullerton Finance
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Yangon - The International Finance Corporation (IFC) will invest US$1.2 million for a 15 per cent stake in the Fullerton Finance, a local finance company for small- and medium-sized enterprises.
Fullerton Finance received a licence in 2014 and operates in Yangon, Mandalay and Ayeyawady regions. It aims to grow its customer base 20 fold from 10,000 customers to 200,000 customers by 2021.
“We welcome IFC’s investment as Fullerton Myanmar continues its strong growth momentum. As we build a sustainable business, we are looking to help our customers grow their own enterprises. Fullerton Myanmar remains focused on adopting industry best practices and using modern technology to efficiently reach urban and rural customers in Myanmar,” said Gan Chee Yen, chief executive officer of Fullerton Financial Holdings.
The IFC’s statement states that the country’s finance industry is just at the blooming stage, and the people still find it hard to get long-term loans without mortgages.
Fullerton has given loans to about 10,000 clients and expects to have 200,000 clients by 2021.
Marcos Brujis, Global Industry Director of IFC, said that the establishment of a strong finance service is vital for SMEs to handle risk management and product development well.
Only 30 per cent of the country’s population tapped finance services last year.
The growth financing demands from micro, small, and medium enterprises (MSMEs) remain high, as access to affordable long-term non-collateralised loans are extremely limited. IFC’s funding will help Fullerton Myanmar address these financial gaps by extending more loans and providing responsible financial services to low-income borrowers and small businesses.
The IFC said the investment is part of an effort by the World Bank Group (WBG) to raise this rate to 70 per cent by 2020. The WBG aims to help 1 billion people to get banking services by 2020.
“It is important for microfinance institutions to be well capitalised, creating a strong foundation for the necessary investment in risk management systems, staff, and product development in order to provide a full menu of products and services to underserved segments of the market,” said Marcos Brujis, IFC global director for Financial Institutions Group.
