34804 - Yoma Agricultural & Logistics Holding

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Summary of Investment Information

Project Number

34804

Company Name

YOMA FLEET LIMITED

Date SPI Disclosed

Feb 13, 2015

Country

Myanmar

Region

East Asia and the Pacific

Projected Board Date

Mar 23, 2015

Environmental Category

C - No Impact

Status

Completed

Last Updated Date

Feb 3, 2022

Department

Regional Industry - MAS Asia & Pac

Industry

Agribusiness and Forestry

Previous Events

Approved : Dec 10, 2015
Signed : Feb 15, 2016
Invested : Aug 2, 2017

Sector

Other

Project Description

Yoma Fleet Limited (the “Company”) was established in early 2014 by Yoma Strategic Holdings Ltd. (“YSH”, the “Sponsor”) and its local partner as the first greenfield provider of vehicle operating leases of scale in Myanmar. The Company aims to take the first mover advantage to serve the strong demand for operating leases including corporates in the agriculture, fast moving consumer goods (“FMCG”) and construction sectors.

The purpose of the Project is to finance the Company’s capex plan to purchase a fleet of various types of vehicles.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	10.0
Equity	10.0

Development Impact

Improved MSMEs reach through alternative financing: The Project will lower barriers of entry for MSMEs to get fleet and equipment through this additional channel for capex financing, in addition to bank borrowings. For instance, about one-third of the Company''s top customers are MSMEs who mainly work in agribusiness, and construction. They are typically facing a severe lack of access to credit due to the non-existence of operating lease providers and strict credit requirements in the banking market in Myanmar. The Project will enable more MSMEs to modernize their equipment and consequently improve their service level and expand their economic activities.

Improved Productivity and Distribution Efficiency: The Project will help to increase the efficiency of the domestic agribusiness, FMCG and construction supply chains through improved mechanization. For example, in Myanmar''s agriculture sector, as of 2010, the number of tractors per thousand population was only 0.2 vs. 2.1 for Vietnam and 3.5 for Thailand. In the FMCG and construction sectors, in some cases the level of equipment utilization is half the international best practice due to the lack of preventive maintenance. The Project will help to address some of the productivity issues by improving utilization and help to enhance distribution efficiency by enabling faster and cleaner transportation.

Direct and Indirect Employment: The Project will help to create a number of direct jobs for staff and significant indirect jobs along the supply chain such as repair and maintenance workers and drivers. We estimated 1,815 additional indirect jobs will be created.

Demonstration Effect: the Company is the first mover in Myanmar to adopt international best practices in terms of insurance and drivers trainings, which will help to raise industry standards and workers'' transferrable skills. The Company requires dealers to employ and train people to a high standard in maintenance skills which are currently not prevalent in the market.

Tax payments: The Project is expected to contribute to the domestic economy through the payment of various taxes such as import duties and corporate income taxes.

Long Term Financing: IFC will provide early stage, long term capital which is not readily available in Myanmar due to the current development of the financial system.

Corporate Governance: IFC is in the position to assist Yoma Agricultural & Logistics Holdings and the Company to establish corporate governance and risk management structures that adhere to international best practices.

Stamp of Approval: IFC''s brand will help YSH and Yoma Agricultural & Logistics Holdings to raise subsequent funding from the market to support their continued expansion.

E&S Category Rationale / Risks and Mitigation

The Project is primarily a long-term commercial vehicle leasing business. The Project does not involve a large physical footprint, except for a parking lot for about 30 vehicles. The leased vehicles will stay with the clients during the lease period (>1 year) who will be responsible for their day-to-day operation. Maintenance will be done mainly through authorized dealers. The Company will not have drivers, nor any material maintenance operations. As such, considering minimal E&S issues and risks associated with this Project, it has been categorized as Category C and would not require any specific E&S requirements.

Contacts

For Inquiries About the Project, Contact

JR Ching
FMI Centre, Level 10 & 11
380 Bogyoke Aung San Road
Pabedan Township
Yangon, Myanmar
Tel: +95 1 240363
Fax: +95 1 246881
http://www.yomastrategic.com

For Inquiries and Comments About IFC, Contact

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IFC Corporate Relations
2121 Pennsylvania Avenue, NW
Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384
E Mail: Webmaster

Local Access of Project Documentation

JR Ching
FMI Centre, Level 10 & 11
380 Bogyoke Aung San Road
Pabedan Township
Yangon, Myanmar
Tel: +95 1 240363
Fax: +95 1 246881
http://www.yomastrategic.com

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