MICROCAPITAL BRIEF: MCE Social Capital Funding $3.3m Loan from Yoma Bank to Proximity Finance for Microfinance in Myanmar

Myanmar-based Yoma Bank recently agreed to lend MMK 5 billion (USD 3.32 million) to Proximity Finance, a microfinance institution (MFI) operating in Myanmar. MCE Social Capital, a US-based NGO, is funding the three-year loan. Proximity Finance CEO Hedvig Sundberg said, “This back-to-back structure of funding allows more investment into Myanmar in hard currency while allowing microfinance institutions to repay in local currency.” The proceeds of the transaction will fund local-currency loans to approximately 12,800 farming families.

Proximity Finance is a unit of Proximity Designs, a US-registered NGO that exclusively serves Myanmar. Proximity Designs offers technical assistance and research services as well as – through Proximity Finance – loans for farming, raising livestock, relocation and small business. Of this loan activity, 92 percent is for agriculture. As of 2018, Proximity Designs reports a gross loan portfolio of USD 18 million disbursed to 91,000 borrowers via 16 branches serving 2,065 villages. The NGO does not accept deposits.

Founded in 2006 as MicroCredit Enterprises, MCE Social Capital is based in the city of San Francisco. It has invested in MFIs in 30 countries, with 71 percent of the resulting retail loans disbursed to women. Much of the money it raises is via guarantees secured from other NGOs and accredited investors, which it uses as collateral to borrow from third-party lenders. As of year-end 2018, MCE Social Capital has total assets of USD 69.2 million.

Founded in 1993, Yoma Bank operates 79 branches in Myanmar. As of March 2019, it has total assets of MMK 2.51 trillion (USD 1.7 billion), deposits of MMK 2.27 trillion (USD 1.5 billion) and a loan portfolio of MMK 1.37 trillion (USD 910 million).

By Eugene DeCosse, Research Associate

Sources and Additional Resources

Myanmar Times article
https://www.mmtimes.com/news/proximity-finance-provide-k5-billion-microfinance-funding.html

Proximity Finance webpage
https://proximitydesigns.org/service/farm-finance/

Proximity Designs homepage
https://proximitydesigns.org/

Proximity Designs financial statements
https://proximitydesigns.org/wp-content/uploads/Proximity-Designs-Audited-Financial-Statements-for-Year-Ended-June-30-2018.pdf

MCE Social Capital homepage
http://www.mcesocap.org/

MCE Social Capital financial statements
http://www.mcesocap.org/wp-content/uploads/2019/06/2018-Audited-Financial-Statements.pdf

Yoma Bank homepage
https://www.yomabank.com

Yoma Bank 2019 Annual Report
https://www.yomabank.com/uploads/Abridged-Financial-Statement-March-2019.pdf

MICROCAPITAL BRIEF: Proximity Finance Myanmar Borrows $1.5m in Local Currency from Grameen Credit Agricole Foundation for Rural Microfinance Lending
https://www.microcapital.org/microcapital-brief-proximity-finance-myanmar-borrows-1-5m-in-local-currency-from-grameen-credit-agricole-foundation-for-rural-microfinance-lending/

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

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