Myanmar MFI Alliance gets USD 5m from Asia Impact Investment Fund


Alliance for Microfinance in Myanmar Ltd, a Mandalay-based deposit taking microfinance institution, has received an equity injection of $5 million from their existing shareholders and new investor, Asia Impact Investment Fund (AIIF), the company announced. The transaction was concluded in August. 

Alliance started its operations in Myanmar in 2014 providing financial services and education to low-income households focusing on women entrepreneurs. “The new investment will strengthen our capital base and ensure the continued expansion, outreach and development of our service portfolio,” said Kim Guenkel, CEO of Alliance, in a statement. Existing shareholders, Base of Pyramid Asia (BOPA), a Singapore-based equity investor in microfinance institutions, Danish Investment Fund for Developing Countries (IFU), Copenhagen head-quartered self-governing state fund, Insitor Impact Fund of Insitor Management, an impact investment firm specializing in equity, debt and mezzanine financing, participated in the latest investment round. 

New shareholder, Asia Impact Investment Fund I, is a joint collaboration between UOB Venture Management Pte Ltd, a subsidiary of United Overseas Bank Limited, and the Singapore branch of Credit Suisse AG. “Through microfinancing and financial education, Alliance Myanmar has been helping to reduce poverty in the less privileged communities in Myanmar,” said Thng Tien Tat, executive director of UOB Venture Management. Being a leading MFI in Mandalay region, Alliance has reached a gross loan portfolio of about 10.07 million in August 2017 through 64,120 active borrows and aims to promote financial inclusion around Myanmar by reaching a gross loan portfolio of $36 million by 2019. Clients can get a loan through a joint liability group, for a loan size between K100,000 ($80) to 500,000 ($400) and through individual small enterprises with loan amount of between K500,000 ($400) and K5 million ($4000). To date, they have got a total savings of about $1.8 million. Alliance’ operations began as a partnership between FIDES from Switzerland and BASIX from India back in 2014. Since then, they have grown  to 11 branches in Myanmar, operating with 358 staff members. Prior to the latest investment round, Alliance closed a $3 million with IFU, Insitor and BOPA closed in the first quarter of 2017. Among the lenders of Alliance are Blue Orchard, a global impact investment firm, Incofin, advisor of impact investment firms and MCE Social Capital, a non-profit impact investment firm. Myanmar has about 250 microfinance institutions, some of which recently received funding. VisionFund Myanmar, in September, received a $4 million financing while Proximity Designs recently closed a $5.38 million back-to-back funding agreement with Yoma Bank. Meanwhile, Acleda, Fullerton, Pact Global Microfinance Fund and Hayman Capital received a follow-on investment of $1 million debt from Maybank this May. 

Source: https://www.dealstreetasia.com/stories/microfinance-firm-alliance-gets-5m-equity-work-financial-inclusion-myanmar-82516/

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