Launch of Yoma Bank’s Agribusiness Finance Program (AFP) supported by LIFT
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Yoma Bank’s Agribusiness Finance Program (AFP) was officially launched in Yangon on December 15.
Yangon, Myanmar , 15 December 2016 – AFP has been established to improve access to finance in Myanmar’s agricultural sector. The Livelihoods and Food Security Trust Fund (LIFT) has contributed USD 11 million to the financing structure for the AFP program operated by Yoma Bank. Since the partnership began in January, 2016, 2,687 lease contracts for farm machinery valued at more than USD 50 million, have been taken up by farmers and rural entrepreneurs, many of whom would otherwise not have been able to afford to introduce machines such as tractors and threshers to farms.
“Accessing finance has been difficult for farmers and they need this support and investment for their businesses,” said Yangon Region Chief Minister U Phyo Min Thein in his opening keynote remarks.
On behalf of LIFT’S Donor Consortium, U.S Ambassador Mr. Scot Marciel said the AFP was a good example of how donors, government and the private sector could form partnerships that effectively delivered what communities needed to increase productivity and prosperity.
“Through this partnership, we have come up with a mechanism that is already working. This program has already been able to mobilize USD 50 million, and it’s not just farm equipment. It is increases in what farmers can grow, increases in incomes and increases in productivity,” Ambassador Marciel said.LIFT Fund Director Andrew Kirkwood said the partnership with Yoma helped develop a more robust, inclusive rural financial market and contribute to the economic development of the rural sector by improving farm productivity and stimulating the growth in off-farm businesses.
“The program has already provided USD 39 million of financing to farmers and small businesses across 10 states and regions. This financing drives down costs for smallholder farms, increases their profits and stimulates the rural economy,” Mr. Kirkwood said.
The AFP allows for hire purchase agreement terms to be reduced from a 30% deposit to a deposit as low as 10% and reduces repayment periods from one year to up to three years.
Special Adviser to Chairman and Yoma Bank CEO Mr. Hal Bosher said: “Yoma Bank is very pleased to support Myanmar’s agriculture sector. Ultimately, we hope to mainstream our Agribusiness Finance Program to provide further support to the community”.
A short video featuring farmers in the Ayeyarwady Delta region, who have purchased farm machinery through the AFP was shown at the launch event. One of the featured farmers Ko Zaw Zaw Lwin, 32 years old, from Ohn Pin Sate Village, in the Ayeyarwady Delta, drives a tractor valued at around USD 30,600, which his family purchased through Yoma Bank’s AFP.
Zaw Zaw Lwin said his family had only been able to purchase the tractor because of the lower deposit required under the AFP. “I wouldn’t buy it if it was 30% (deposit). I can manage 10% so I bought it. If it was 30%, I would have to wait another three years to get it,” Zaw Zaw Lwin said.
“All of this was possible because I could get it at 10% (deposit), otherwise I can’t afford it,” Zaw Zaw Lwin added.