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Yoma makes push into Myanmar's financial services market
MYANMAR-focused Yoma Strategic Holdings is making a push into a "fourth pillar" of business - financial services - with plans to acquire a big share of the country's leading mobile payment provider.
The mainboard-listed company announced on Tuesday that it plans to acquire a 34 per cent stake in Digital Money Myanmar Co Ltd (Wave Money) from an associate company, First Myanmar Investment Company Limited (FMI), for US$19.4 million. FMI's controlling shareholder is Yoma's executive chairman and Burmese tycoon Serge Pun.
Yoma said the acquisition will target the underserved markets in Myanmar through payment and lending offerings.
It intends to grow the new platform as the company's "fourth pillar" of business alongside real estate, consumer and automotive & heavy equipment.
Said Mr Pun, who is also Yoma's controlling shareholder: "Adding financial services as our fourth pillar is one of the most significant developments for Yoma Strategic in recent years. Financial services is the backbone of the (Myanmar) economy, (but) currently the lack of credit and limitations in financial access is hampering growth. We aim to push innovative mobile financial services, including payment and credit extensions, to drive efficiency in the sector.
"Wave Money has an excellent head start with its broad reach across the country, and is a platform that we will leverage as we develop our offering in the sector."
Set up in 2015, Wave Money's biggest shareholder is Norwegian telco giant Telenor with a 51 per cent stake. After Yoma's acquisition, FMI will be left with a 10 per cent interest, while Yoma Bank will continue to hold a remaining 5 per cent stake.
Yoma said Wave Money has more than 20,000 agents across Myanmar, 10 times the number of bank branches in the country. Although it reported a net loss for the nine months ended Dec 31, 2017 as at January this year, its monthly revenue had grown by 1,130 per cent year-on-year while its daily transactions had increased 2,639 per cent, Yoma added.
Wave Money's current products include money transfer, either through mobile accounts or at its own agents, an online payment gateway and salary disbursements. It became Myanmar's first licensed provider after the country passed the Mobile Financial Services Regulation in October 2016.
Yoma has been granted a waiver from seeking shareholder approval for the proposed acquisition.
Its shares closed one Singapore cent higher at S$0.42 on Tuesday.