Myanmar: Norway to Take Stake in MFI
Myanmar, February, 02 2015 -
The Norwegian Investment Fund for Developing Countries (Norfund) has acquired the right to take up to a 25 percent stake in local microfinance company Myanmar Finance International.
The microfinance firm is owned by AIM-listed Myanmar Investments International as well as Myanmar Finance Corporation.
Norfund is Norway’s main vehicle for combating poverty through private-sector development.
“Norfund is an experienced investor in microfinance businesses in developing countries where they provide equity and debt financing. We welcome their experience to help build MFIL into a leading Myanmar microfinance company,” said Myanmar Finance International managing director U Aung Htun in a press release.
A third tranche of financing, of US$750,000, is due to be contributed by Myanmar Investments and Myanmar Finance Corporation to their microfinance joint venture in February 2015, with a fourth tranche of $2.05 million expected in 2015, according to a filing on the AIM exchange.
Norfund will be able to exercise its option when the fourth tranche is called, which would see Myanmar Investment and Myanmar Finance Corporation’s ownership of the microfinance firm drop to 37.5 percent each. Norfund’s option is valid until September 2016.
Myanmar Finance Corporation was formed in 2012, and as of mid 2014, it claimed 10,000 clients and a loan portfolio of about K800 million ($780,000).
The microfinance industry has been attracting increased interest, with business and non-profits rushing into the sector following a 2013 law on the industry.