US Agency OPIC to Inject $5m Debt Facility in Myanmar MFI DAWN

May 2017
, May, 03 2017 - US government agency Overseas Private Investment Corporation (OPIC) is making a debt capital investment of $5 million in Early Dawn Microfinance Company Ltd (DAWN), a Yangon based deposit-taking micro-lender.

“The OPIC loan will support access to finance for micro and small business-owners in Myanmar, specifically targeting low-income female entrepreneurs who are often the country’s most economically disadvantaged,” stated the company release.

DAWN, which started in 2002, is an original project of Save the Children Myanmar and in March 2015, it transformed into a regulated deposit-taking microfinance company capitalised by global funds Accion, FMO and Triodos.

The MFI provides business, top-up and seasonal loans to self-employed market vendors and small manufacturers.

Its largest shareholder and operating partner is Cambridge headquartered Accion, a global nonprofit and financial inclusion pioneer whose investments are made through the Accion Gateway Fund for microfinance institutions and their other two funds, Venture Lab and Accion Frontier Inclusion Fund.

Other shareholders of DAWN include FMO, the Dutch Development bank, Triodos Investment Management, a wholly owned subsidiary of Triodos Bank and Save the Children. MetLife Foundation in 2015, awarded a $250,000 grant to support DAWN.

As of March 15, 2017, DAWN had over 85,000 clients served by its 24 branches across five regions in Myanmar. Their loan portfolio is over K14 billion.

“OPIC’s support to DAWN will help achieve its goal of reaching 150,000 customers by 2019,” as stated.

OPIC targets credit facilities to individual MFIs, risk-sharing agreements with other co-lenders and loan guaranties supporting innovative industry efforts. With over $1 billion in current commitments, OPIC provides financing both directly and indirectly to nearly 200 MFIs in more than 50 countries.

In Myanmar, OPIC had made a $250 million loan to Apollo Towers Myanmar Limited in June 2016.

Myanmar has over 250 microfinance institutions and some are yet to commercially operate. The International Finance Corporation, the private lending arm of the World Bank Group, also helps with debt financing for microfinance institutions in Myanmar. Back in 2016, IFC announced possible extension of a $21 million debt to four to five microfinance institutions in Myanmar.

Source : Deal Street Asia

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