Project detail - PACT GLOBAL MICROFINANCE FUND

PACT GLOBAL MICROFINANCE FUND

Back to map

Who is our client

Pact Global Microfinance Fund is a wholly owned subsidiary of Pact, Inc. (“Pact”) incorporated in the State of Delaware, USA. PGMF is a charity created by Pact, a non-profit international development organization founded in 1971, active in nearly 40 countries. PGMF operates directly as an international non-governmental organization in Myanmar, where it is licensed by the Financial Regulatory Department to implement microfinance activities. PGMF is Myanmar’s largest microfinance institution with a loan book of ~USD 275 million serving more than 950,000 borrowers – 99% of them women – which is present in more than 79 townships and >14,000 villages.

Funding objective

The proposed funding is a senior unsecured facility of USD 15 million, with a tenor of 5 years. The loan will be used to finance PGMF’s microfinance portfolio.

Why we fund this project

Microfinance institutions play a critical role in the financial inclusion by serving the financing needs of the under served customer segment left out by the formal banking sector. PGMF is the market leader in Myanmar microfinance sector having more than 27% of the total market share. This investment proposal is highly inclusive, given that PGMF plays a critical role in developing the microfinance market in Myanmar with a widespread coverage focused in rural areas (85% of the loan book) and strategic emphasis on female empowerment (99% of the borrowers are female). The transaction classifies as reducing inequalities as Myanmar is a least developed country. PGMF’s social mission resonates with FMO’s strategic objective of supporting SDG 10 and SDG 8.

Environmental and social rationale

PGMF’s loan portfolio comprises of only group loans and individual loans. Given the nature and size of the loans this client is categorized as a FI-C client as E&S risk is limited. The company does not have exposure to activities on FMO’s exclusion list or IFC-PS triggered transactions.

Region
Asia
Country
Myanmar
Sector
Financial Institutions
Signing date
8/10/2020
Total FMO financing
USD 15.00 MLN
Fund
FMO
Risk categorization on environmental and social impacts, A = high risk, B+ = medium high risk, B = medium risk, C = low risk Environmental & Social Category
(A, B+, B or C)
C