The Challenge

Myanmar remains one of Asia’s poorest and most fragile economies. At the same time, the country is moving into the early stages of industrialization and is one of the fastest-growing economies in the East Asia and Pacific (EAP) region.

The financial sector in Myanmar is at an early stage of development, characterized by a dominance of commercial banks and relatively small-scale financial institutions (FIs) with limited product and service offerings. Access to finance is the biggest constraint for SMEs in Myanmar, with the micro, small and medium enterprises (MSME) financing gap at $13.8 billion.

From the supply side, banks tend to view SMEs as risky borrowers, as they often lack formal financial statements and acceptable forms of collateral. In addition, the interest rate cap in the country also tends to shift lending to lower risk activities, to the detriment of MSMEs.

Joining Forces

IFC, through the World Bank Group’s IDA18 Private Sector Window’s Blended Finance Facility (PSW-BFF) and the Women Entrepreneurs Finance Initiative (We-Fi) are joining forces to support Yoma Bank, the fourth largest private bank in Myanmar. The project is part of IFC’s Small Loan Guarantee Program (SLGP), which provides risk-sharing instruments to client banks looking to expand small and medium enterprises (SME) lending in difficult-to-serve markets.

The Risk Sharing Facility (RSF) supported by PSW-BFF, along with a performance-based incentive (PBI) from We-Fi, will support and incentivize Yoma Bank to scale up its SME and very small enterprise (VSE) lending with a distinct focus on women and develop its technological capabilities to track this portfolio. This project is the first RSF in the Myanmar market and, as such, will help introduce a new and innovative structure in the SME financing space in the country.

The RSF supports the bank to expand lending to riskier and underserved SMEs and VSEs who have little or no collateral. In addition, the We-Fi’s PBI is expected to incentivize the Bank with partial reimbursement of the extra costs incurred in extending financing to women.


The Project will provide Yoma Bank with an efficient risk mitigation tool to motivate them to increase lending to SMEs and adopt new products, such as unsecured lending. The project is expected to support a $160 million portfolio of new loans to thousands of very small (VSEs), small, and medium-sized enterprises (SMEs), and about one-third of the portfolio is dedicated to women-led ventures. Crucially, the project will serve a market that is not actively pursued by other banks due to perceived higher risks. Thus, the success of the project would demonstrate the viability of the SME and VSE segments and potentially crowd-in other development finance institutions

More Information: