YOMA BANK PROVIDES NEWLY UNSECURED SME FINANCING TO KARGO – MYANMAR’S FIRST ONLINE GOODS TRANSPORTATION SERVICE
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MMK200 million loan will help the tech-based service perform same-day payments to truck drivers and more
Yangon, Myanmar – March 21, 2019 – Yoma Bank and Kargo today announced that it has signed an SME loan agreement with online goods transportation service Kargo on 11 March 2019. Under the agreement, Yoma Bank will provide unsecured financing based on Kargo’s Accounts Receivable. The initial loan amount of MMK200 million will be added in tandem with Kargo’s business growth.
With Yoma Bank’s Unsecured SME Financing, Kargo is now able to pay all its truck drivers on the same day and will boost the company’s ability to grow its customer base and manage its invoices.
The development aligns with Yoma Bank’s key focus to support the growth of Myanmar’s SMEs. Its Unsecured SME Financing therefore seeks to solve the common problem of cash flow management – especially when these SMEs offer their services to multinational companies. Its Unsecured SME Financing agreement with Kargo is also the first that the bank has offered to SMEs since the Central Bank of Myanmar approved the disbursement of unsecured lending.
The Bank is also planning on releasing more products aimed at SMEs in Myanmar. Namely, those which are innovative in its options and flexibility; all while taking into account feedback from its SME customers.
“At Yoma Bank, we are committed to finding innovative ways of supporting Myanmar’s SMEs”, said Hal Bosher, CEO of Yoma Bank. “Unsecured financing is solely based on the cash flow of the business and is a progressive way of supporting smaller enterprises. This financing is the first of many and we look forward to seeing innovative and tech-driven SMEs like Kargo thrive in this market.”
Founded in 2016, Kargo is Myanmar’s first tech-based online transportation service that easily connects independent truck drivers, fleet owners, third-party logistics (3PL) companies and commercial logistics providers directly with businesses that need reliable, trackable distribution and delivery of their goods across the country. To date, the company has connected almost 2,000 truck drivers in Myanmar – providing country-wide goods transportation for SMEs and corporate enterprises.
Although founded as a start-up using funding from its founder, Alex Wicks, Kargo continued to roll out its business with capital injected by angel investors and Singapore-based venture capital firm SEED Myanmar during a seed round in 2017. In February 2018, the company received a six-figure grant from GSMA – which Kargo utilized to sustain its rapid expansion.
Later, in July 2018, Kargo received $50,000 from the Singaporean government after winning the Startups SG prize and winning of the ‘Best Logistics and Supply Chain Startup’ at the Echelon top 100 Start-up Competition.
“When we first envisioned Kargo, we were starting out in an extremely fragmented market that had a very opaque pricing system,” said Alex Wicks, founder and CEO of Kargo. “We’ve made great strides in growing our driver network to almost 2,000 independent truck drivers, fleet owners, 3PLs and commercial trucking companies, making Kargo’s virtual fleet the largest in Myanmar, and completing over 5,000 deliveries to date. With Yoma Bank’s support we will be able to fuel our growth, business growth and drivers’ income, as we seek to realize our vision to provide quality trucking logistics solutions that are priced fairly for both the consumer and driver.”