PACT GLOBAL MICROFINANCE FUND
Status: Approved investmentWhy disclosure?
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Disclaimer
The information as disclosed is indicative and provided on an "as-is/as available" basis for general informational purposes only and should not be construed as financial, legal or investment advice, nor as a commitment or an offer to arrange or provide any financing. The final decision to provide financing is subject to the terms and conditions of FMO in its sole and absolute discretion. When providing links to other sites, FMO bears no responsibility for the accuracy, legality or content of the external site or for that of subsequent links. The information on proposed investment for high-risk investments is made available in the language relevant to the country or region where the bulk of operations take place. Translations of any information into languages other than English are intended as a convenience for local stakeholders. In case of any discrepancy, the information provided in English will prevail.
Who is our customer
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.
What is our 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 do we fund this investment?
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.
What is the Environmental and Social categorization 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
- Publication date
- 3/27/2020
- Effective date
- 8/10/2020
- Total FMO financing
- USD 15.00 MLN
- Funding
- FMO NV
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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