Myanmar’s financial sector is greatly underdeveloped, with businesses and consumers facing limited access to finance, especially in rural areas. Smallholder farmers are often forced to sell at low prices due to imbalances in supply and demand. Despite poor storage conditions, farmers across Myanmar are often forced to store harvested products to sell at a later time, leading to deterioration and substantial losses.
IFC and GAFSP will provide a US$3 million loan to Sohanlal Commodity Management Private Limited (SLCM), India’s sixth largest post-harvest agri supply chain solutions provider. SLCM Myanmar is a fully-owned subsidiary of SLCM, that offers commodity-backed financing in addition to warehouse and collateral management services. The company will use the investment to bring commodity-backed financing and sophisticated warehouse and collateral management services to Myanmar.
- Access to Finance
Consumers across Myanmar are expected to experience an increase in the amount of food available to them due to a reduction in post-harvest losses caused by infestation, excess humidity, and inadequate storage.
Farmers in Myanmar will be able to properly store higher volumes and reduce post-harvest losses, currently estimated at about 20 percent.
Financial services will be provided to underserved agricultural traders, smallholder farmers, including women, and MSEs, increasing their access to finance in the agribusiness sector.
SLCM will help attract more banks and collateral managers to engage in the business of commodity-backed financing, an entity new to Myanmar, through the provision of enabling services and demonstration effects in the sector.
Mr. Niraj Shah
Head, GAFSP Private Sector Window
Tel: 202 473 3743
Photo: Markus Kostner / World Bank