Panel on Agricultural Financing in Myanmar
MPE&VCA member U Tin Min Htut, Associate Director of Yangon Capital Partners (YCP), took part in the “Agricultural Value Chain Finance in Myanmar” panel organised by DaNa Facility and Myanmar Economic Association. The discussion revolved around the most important issues related to agriculture financing in Myanmar: investment opportunities, managing risk, loan supervision, expansion in agriculture financing, among others.
Htut discussed the need to reduce the high interest rate on deposits, an important policy change for the sector. “Though a higher interest rate on deposit could promote more saving, it leads to a higher cost of capital for businesses. If the interest floor is reduced, it would also promote lower collateralised interest rate. Because of the wider spread between collateralised and non-collateralised lending, there would likely be more non-recourse lendings,” he said.
Among YCP’s investment is UniVege, a well-known brand for organic salad and vegetables that are retailed across Myanmar. “Scalability is very important. We are interested in technology in the agriculture space (AgTech) and others like premium businesses born out of the agriculture sector,” said Htut. Although entrepreneurs are facing many challenges that arise in the agriculture sector such as uncertainty in policy issues and inefficiency in the value chain and scalability, equity investors like YCP are willing to invest in companies that are willing to solve such issues.