The IFC is providing $5mn in trade financing to Myanmar Oriental Bank (MOB), the first bank in the country to join the IFC’s Global Trade Finance Program (GTFP).
In an effort to increase trade flow, generate more foreign exchange, and create jobs, the IFC will be issuing guarantees for MOB’s LCs as well as additional credit for the bank to issue further LCs, the IFC tells GTR.
MOB is the first bank in Myanmar to join the IFC’s GTFP, a facility that will boost MOB’s capacity to cover the payment risks of exporters’ banks while granting trade financing to local companies, mostly small and medium enterprises.
The IFC tells GTR that the $5mn will be enough to support the existing volume of MOB’s trade business, but that volumes will be reviewed and if required the amounts will be increased. The financing is available to MOB on an ongoing basis, so once the limits used for a specific trade transaction are released on account of the transaction being paid off, they become available again.
“Becoming a part of the IFC’s extensive trade network is key to our bank being recognised globally and expanding our international transactions, says Kyi Kyi Than, MOB managing director in a recent release.
Vikram Kumar, IFC resident representative in Myanmar says: “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 SMEs, which are key drivers for economic growth and employment in the country.”
Since its launch in 2005, more than 550 banks from 150 countries have joined the IFC’s GTFP, which aims to promote trade in emerging markets by linking local financial institutions with major international banks and enabling local lenders to offer more competitive financing.