IFC, a member of the World Bank Group, announced today that it will provide a $7 million convertible loan to Myanmar Oriental Bank Ltd. to help the lender expand financing for small and medium enterprises in urgent need of capital to grow their businesses and create jobs The Financial reported on 19 August.
As Myanmar’s financial system is still at an early stage of development, more than half of the smaller businesses in the country do not have bank accounts – a figure that is far lower than that of neighbouring countries. IFC’s long-term financing will help Myanmar Oriental Bank move closer toward its goal of providing more than $200 million in loans to small and medium enterprises, its core client group, by 2019, according to IFC.
The loan complements IFC’s ongoing advisory support to Myanmar Oriental Bank on strengthening its corporate governance and improving its trade-finance operations. Myanmar Oriental Bank was the first bank in the country to join IFC’s Global Trade Finance Program in early 2014 with a $5 million trade line, which aims to help local companies process their imports and exports, generate more foreign exchange reserves, and create jobs.
IFC will also advise Myanmar Oriental Bank on establishing policies and procedures to identify and manage environmental and social risks associated with the business activities it finances.