ADB, Maybank partner to provide $20 Million for microfinance in Myanmar

The Asian Development Bank (ADB) signed an agreement with Maybank, under ADB’s Microfinance Risk Participation and Guarantee Program, to expand local currency lending and provide guarantee of up to $20 million to the microfinance sector in Myanmar.

The agreement was signed by Christine Engstrom, Director of ADB’s Private Sector Financial Institutions Division, and Abdul Malek Mohd Khair, Country Head, Maybank Myanmar, at a ceremony in Singapore.

“We’re excited to partner with Maybank, an established player in microfinance in many countries in developing Asia,” said Ms. Engstrom. “Our partnership will help further expand the Microfinance Program, which has already facilitated more than $670 million in local currency loans across the region since 2012. Together, Maybank and ADB will improve access to financial services to even more low-income families and small-business owners, especially in rural and remote areas in Myanmar.”

Currently, many microfinance institutions struggle to access funds for growth from the commercial market to meet the demands of clients. Only approximately 12% of women have access to financial services in Myanmar. Through the Microfinance Program, ADB aims to fill market gaps by sharing risks with commercial banks to promote local currency lending to these institutions. This helps to mitigate microfinance institutions’ exposure to foreign exchange risks.

“This collaboration represents another key step in the bank’s strategy to build on its strong franchise in the region and further expand its support to the microfinance segment in Myanmar,” said Mr. Khair. “Maybank remains committed to supporting the Government of Myanmar’s goal to expand formal financial inclusion in the country to 40% by 2020 in line with the financial inclusion roadmap of Myanmar.”

Backed by ADB’s AAA credit rating, the Microfinance Program provides risk sharing and guarantees to international and local partner financial institutions. Since 2012, the Microfinance Program has supported more than 3.5 million microfinance borrowers, primarily in India, Bangladesh, and Indonesia. To date, more than $350 million private sector cofinancing has been raised through the program.

Original source: ADB
Published on 30 April 2018