Myanmar Oriental Bank Ltd (MOB) will receive a $5-million trade financing facility from the International Finance Corporation (IFC), the World Bank Group’s private sector financing arm said.
The move makes MOB the first bank in Myanmar to join IFC’s Global Trade Finance Program, which links local financial institutions with major international banks to enable local lenders to offer competitive financing.
IFC said the facility will “allow the bank to help local companies increase their imports and exports, generate more foreign exchange and create jobs.”
This facility will enhance MOB’s capacity to “cover the payment risks of exporters’ banks while granting trade financing to local companies, mostly small and medium enterprises,” IFC said in a statement.
“This trade line will help extend our capacity in providing financing to local importers and exporters – an area that is still new to us,” said Kyi Kyi Than, MOB Managing Director.
“Becoming a part of IFC’s extensive trade network is key to our bank being recognised globally and expanding our international transactions.”
IFC will also support MOB through advisory services to strengthen its corporate governance and trade finance operations, it said.
“By boosting MOB’s capacity to deliver trade-finance solutions, IFC is helping improve trade flows that are vital to enterprise growth as the economy opens up,” said Vikram Kumar, IFC Resident Representative in Myanmar.
“This marks the beginning of our support for local banks with capital and advisory services. This will help develop Myanmar’s financial sector and ultimately improve access to finance for small and medium enterprises, which are key drivers for economic growth and employment in the country.”
IFC, together with the World Bank, is currently working on improving Myanmar’s investment climate, access to finance and infrastructure. Its Global Trade Finance Program supports trade in emerging markets by providing partial or full guarantees for individual trade transactions.
Since its inception in 2005, the program has issued over 17,000 guarantees totalling $28 billion to banks for trade-related payment obligations of their financial-institution clients in emerging markets, IFC said. The program includes more than 550 partner banks in 150 countries.
Established in 1993, MOB has 26 branches across the country and was the first private bank in Myanmar to obtain an international banking licence, accept visa credit cards and to partner with Western Union Money Transfer Service.
