Proposed IFC Investment in Yoma Bank 

Myanmar 

July 1, 2014 

United States Position 

The United States welcomes the IFC's attention to supporting the SME sector and access to 

finance in Burma. Economic reforms, including financial sector development, are still at an 

early stage in the country. As a fundamental element of a successful transition to a market 

economy, the nascent financial system needs advisory services and resources that will allow 

domestic financial institutions to begin allocating capital to productive uses rather than 

continuing the less transparent process previously used by the government and vested interests. 

We appreciate that this proposed investment in Yoma Bank supports the development of a 

healthy financial sector and helps address the acute lack of access to finance throughout Burma. 

Expanding finance for SMEs is an important way for the IFC to contribute to economic growth 

and jobs, and demonstrates the concrete benefits of economic reform to average citizens. 

Given the complexity of identifying appropriate IFC clients in Burma and the lack of robust 

private sector standards, we agree with the IFC’s approach of beginning this engagement with 

advisory support to Yoma Bank to help strengthen its corporate governance and broader systems 

of risk management. 

 

The United States has stressed the importance of careful management of environmental and 

social risks combined with robust communication with civil society, as key themes for both 

private and public sector engagement in Burma. 

The United States appreciates that the IFC is applying its expanded exclusion list to this 

investment, which will preclude the client from using IFC resources to support activities 

involving, for example, involuntary resettlement, degradation of critical habitat, unsustainable 

forestry, or adverse impact on cultural heritage. 

The United States recognizes that IFC clients are typically permitted a period of time to develop 

and implement an environmental and social management system (ESMS) that meets the IFC’s 

performance standards. The United States urges the project sponsor, with support from IFC, to 

focus attention and resources on expeditiously developing and implementing a robust ESMS 

within six months from disbursement. The United States recognizes that the scale of activities 

supported by this investment is small. Nonetheless, in the context of Burma, where adequate 

local standards are not in place, ongoing IFC supervision over potential environmental and social 

risks should be a priority. The United States will closely follow IFC’s plan for supervision of 

this investment, including of environmental and social aspects. Furthermore, the United States 

requests that the IFC provide an informal update to the Board in early 2015 on the progress of 

the project sponsor in meeting its commitments around the ESMS. The United States also 

encourages the project sponsor to make public on its web site those aspects of its ESMS that are 

not commercially sensitive, to demonstrate its commitment in this area. 
To understand the political, economic, and social context for private sector development, it is 

important for the IFC to be in dialogue with a range of local stakeholders, including civil society. 

The United States appreciates that the IFC has held several workshops with civil society 

organizations (CSOs) to introduce them to IFC investment priorities, accountability mechanisms 

including the Compliance Advisor/Ombudsman, and the IFC performance standards. It will take 

ongoing effort for the IFC to build trust and credibility with local actors through strong two-way 

communication on issues relevant to the sectors in which the IFC is working. The United States 

request that the IFC consult with CSOs within the next quarter on the landscape of the SME 

sector and access to finance, in the context of IFC investments in Yoma Bank, ACLEDA and 

Myanmar Oriental Bank. 

With these comments, the United States can support this investment and wish the IFC team and 

project sponsors well in implementation. The United States looks forward to following 

developments with this investment.