The proposed project consists of a risk sharing facility for a portfolio of up to US$60 million equivalent with IFC and the Bank equally sharing the risk of the underlying portfolio. IFC’s exposure in the Portfolio will be up to US$30 million equivalent.

The Project is part of IFC’s Small Loan Guarantee Program (SLGP) and is supported by the IDA18 IFC-MIGA Private Sector Window’s Blended Finance Facility (PSW-BFF), which was created by the Word Bank Group to catalyze private sector investment in IDA countries, with a focus on fragile and conflict-affected states. The Project is also supported by the Women Entrepreneurs Finance Initiative (We-Fi). We-Fi is a collaborative partnership among 14 governments, six multilateral development banks (MDBs), and other public and private sector stakeholders, hosted by the World Bank Group which seeks to address financial and non-financial constraints faced by women-owned small and medium enterprises (SMEs) in developing countries. PSW BFF, and We-Fi support would enable IFC to rapidly roll out a program of risk sharing facilities to reach segments facing serious market failures in IDA countries and provide access to finance to such underserved targeted market segments which IFC could not otherwise serve. The concessional support from IDA PSW and We-Fi will enable Yoma Bank expand lending to a riskier SME segment of the market including women SMEs/VSEs.The level of concessionality (i.e., “subsidy”) to be provided by the blended concessional finance co-investment is estimated to be 4 to 9 percent of the total portfolio of US$800 million, for the whole SLGP. This project benefits from the SLGP and the concessionality embedded in the program. This estimate is based on the present value of the difference between (i) a “reference price” (either a market price if available; the price calculated using IFC’s pricing model, which comprises three main elements: risk, cost and profit; or a negotiated price) and (ii) the “concessional price” being charged by the blended concessional finance co-investment under the Program. We-Fi is also expected to provide the Bank with an up to US$0.238 million subsidy to be structured in the form of a performance-based incentive to encourage the Bank to expand lending to women SMEs/VSEs. The level of subsidy provided by the blended concessional finance co-investment is estimated at up to 0.4 percent of the total Project cost of US$60 million. This estimate assumes that the project will fully reach the agreed impact targets and shall be fully paid out only upon achievement of predefined targets. Further details and historical information on estimated subsidy levels in IFC’s blended finance portfolio can be found at: www.ifc.org/blendedfinance. As is the case with all IFC’s blended concessional finance co-investments, this project has been assessed against the Enhanced Blended Concessional Finance Principles for DFI Private Sector Operations adopted by IFC and more than 20 other DFIs in 2017. Further information on these Enhanced Principles and IFC’s blended finance approach and governance can also be found at: www.ifc.org/blendedfinance. The SLGP is a platform approach that can be accessed by other financial institutions in Myanmar and other IDA PSW markets.

30.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee	30.0
Loan
Equity

* These investment figures are indicative

Project level impact: Increased Access for SMEs/VSEs including women owned/operated SMEs/VSEs: IFC anticipates that this project will provide the Bank with an efficient risk mitigation tool that will support it to sustainably increase financing to SMEs and very small enterprises (VSEs) including women owned SMEs and VSEs. These enterprises represent over 90 percent of the total officially registered enterprises in the country and contribute about 80 percent to employment thus presenting a strategic importance for job creation and the country's economic growth but face constrained access to credit with the financing gap estimated at 21.3 percent of GDP. Market level impact: Competitiveness: IFC expects that this project can demonstrate bankability of SMEs and VSEs on a cashflow lending basis thereby motivate other financial institutions to introduce customized products for underserved segments and come up with alternative credit scoring models. This competitive push would help scale the availability of finance for this market segment and promote financial inclusion in Myanmar where credit to the private sector, which is estimated at 25 percent of GDP, remains relatively low.

- Innovative Financing Structure: This risk mitigation product would cover 50 percent of potential losses on all eligible SME/VSE loans to be originated by the Bank and added as eligible loans under the RSF, thus motivate the Bank to take additional risk, adopt and expand new SME/VSE lending products serving SMEs/VSEs and targeting women owned/operated SMEs/VSEs, such as unsecured lending and cater to the financial needs of SMEs/VSEs under-served segments. - Knowledge, Innovation and Capacity Building: IFC complements each SLGP investment with advisory services that aim to provide operational implementation support and build capacity to ensure alignment of product strategy to the local SME/VSE market demand.

No ESAP is required.