MICROCAPITAL BRIEF: International Finance Corporation (IFC) Acquires 15% Equity Stake in Myanmar-based Microfinance Institution (MFI) Fullerton Finance for $1.2m

The International Finance Corporation (IFC), a member of the US-based World Bank Group that aims to increase economic growth in developing countries, recently announced that it has made an equity investment of USD 1.2 million in Fullerton Finance (Myanmar) Company Limited, a microfinance institution (MFI) that lends to micro-, small and medium-sized enterprises (MSMEs) and low-income individuals in Myanmar. IFC acquired 15 percent of the equity in the MFI, which plans to use the cash to expand its lending activity within the country.

Marcos Brujis, the global director for the financial institutions group of IFC, said that “it is important for microfinance institutions to be well capitalized, 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”[1]. Gan Chee Yen, who serves as the chief executive officer of the MFI’s majority shareholder, Fullerton Financial Holdings, added that “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”[1].

As of 2014, the IFC reported total assets of USD 84.1 billion, net income of USD 1.48 billion and return on assets of 1.8 percent. In Myanmar, IFC aims to contribute to the strengthening of infrastructure and the private sector. IFC supports the goal of the government of Myanmar of expanding financial inclusion from 30 percent in 2014 to 70 percent in 2020. Financial information on Fullerton Myanmar and Capital Diamond Star Group is unavailable. Fullerton Financial Holdings reported SGD 17.9 billion (USD 12.6 billion) in outstanding loans, SGD 13.7 billion (USD 9.7 billion) in deposits and return on equity of 5.4 percent as of 2014.

By Alíz Crowley, Research Associate

About Fullerton Finance (Myanmar) Company Limited

Fullerton Finance (Myanmar) Company Limited is a microfinance institution (MFI) in Myanmar. The MFI was established in 2014 in Yangon, Myanmar. As of 2015, the organization operates in the following three regions of the country: Yangon, Ayerwaddy and Mandalay. Fullerton Finance serves low-income individuals and micro-, small and medium-sized enterprises (MSMEs) in both urban and rural areas. The organization is licensed and it takes deposits. Shareholders of the MFI include Singapore-based financial services corporation Fullerton Financial Holdings, which owns an equity stake of 70 percent; local conglomerate Capital Diamond Star Group, which owns a 15-percent equity stake; and the International Finance Corporation (IFC), the private investment arm of the World Bank Group, which owns 15 percent of the organization as of 2015. Further financial information on Fullerton Myanmar is unavailable. Fullerton Financial Holdings reported SGD 17.9 billion (USD 12.6 billion) in outstanding loans, SGD 13.7 billion (USD 9.7 billion) in deposits and return on equity of 5.4 percent as of 2014.

About the International Finance Corporation (IFC)

The International Finance Corporation (IFC), a US-based member of the World Bank Group, offers loans, equity investments, advisory and risk mitigation services and technical assistance to private companies with the intent of alleviating poverty and promoting open and competitive markets in developing countries. As of 2014, IFC has 184 member countries that drive its policies and approve disbursements. As of 2014, IFC reported total assets of USD 84.1 billion, net income of USD 1.48 billion and return on assets of 1.8 percent.

Sources and Additional Resources

[1] International Finance Corporation, News and Events, Fullerton Myanmar welcomes IFC’s investment, expanding access to microenterprises

[1] Fullerton Financial Holdings, Financial Highlights

MicroCapital Universe Profile: Fullerton Finance (Myanmar) Company Limited

MicroCapital Universe Profile: International Finance Corporation (IFC)

Do you know that MicroCapital publishes the MicroCapital Monitor newspaper each month? Find out more at https://www.microcapital.org/products-page/

Similar Posts: