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Chairman's Report

Dr. IN Channy, Chairman

Myanmar's Growth Momentum Strong

Economy and Financial Industry in Myanmar

The economy is expected to grow by 8.5 percent this year and at a similar pace in 2017, fueled by strong growth momentum and expansionary macroeconomic policies. The projected increase in the fiscal deficit amounting to almost 2 percent of GDP is expected to provide an expansionary stimulus and contribute to strong GDP growth. Myanmar has made impressive strides in economic reform, including in the dismantling of trade barriers and the opening of the banking sector. With continued economic reforms and foreign direct investment, the country's economic prospects look favorable.

The fast credit growth coupled with strong domestic demand pushed inflation to 8 percent last May and prices are expected to rise further, especially given the impact of the recent floods on agricultural production.

The Central Bank of Myanmar's recent move to close the exchange rate gap between formal and informal markets was a major step forward.

In the financial sector, enforcing prudential measures to slow credit growth while modernizing the regulatory and supervisory framework to safeguard financial stability, particularly in view of the entry into the country of nine foreign banks this year, is a positive step forward.

More reforms have continued in order to further improve the investment and business environment, and to enhance the government's macroeconomic management capacity. It is expected that this will promote efficiency in the financial sector, help modernize banking and finance activities, including the initiation of electronic payments and settlement systems. Moreover, this will strengthen supervisory and regulatory regimes in banking and finance, and streamline economic and financial reforms to support more inclusive growth with special emphasis on the development of SMEs and financial inclusion. It is also worth noting that the government is implementing its plan under the purview of the recently established Securities Exchange Commission of the Ministry of Finance (the MoF) to establish the Yangon Stock Exchange.

Key Players in the Financial Sector

There are 4 state owned banks, 24 private banks, 9 foreign bank branches, and 48 representative bank offices, as well as 168 licensed Microfinance Institutions which include 5 INGOs, 24 NGOs, 22 Foreign Companies, and 117 Local Companies. ACLEDA MFI Myanmar Co. Ltd. (AMM) is amongst the 168 Licensed MFIs.

ACLEDA MFI Myanmar Co., Ltd.'s Governance

During 2015/16 there were a number of changes to the governance of the Group. Chairman CHEA Sok who had a long and distinguished career in the banking and financial sector reached his retirement age after serving for more than three years as the Chairman of ACLEDA MFI Myanmar Co., Ltd. I'm sure the Shareholders, Directors and staff will join me in thanking him for his enormous contribution to ACLEDA MFI Myanmar Co., Ltd. and wish him very good health, prosperity, and happiness. I have been appointed by the Board as the Chairman of the Board of Directors this year, succeeding former Chairman CHEA Sok. Nevertheless, there were also a number of other changes to the Shareholder Representative and Directors in Fiscal Year 2015/16. Mr. PROM Visoth resigned as Shareholder Representative and Mr. CHAN Serey resigned as a Director. Our gratitude is extended to them for their enormous contributions and services they have rendered to ACLEDA MFI Myanmar Co., Ltd. over the years. Dr. JOACHIM TREDE and Mr. VINCENT GROS have been appointed as Directors, and I wholeheartedly welcome them to the Board.

The Board met face-to-face three times in Myanmar in June, September of 2015 and March of 2016 and one time in Cambodia in December 2015. In addition, four resolutions were passed by e-mail during the course of the year 2015/16. Each meeting normally lasts one whole day.

As an indication of growth potential, ACLEDA MFI Myanmar Co., Ltd. has already opened six new offices, with one branch and four sub-branches located in Yangon Region and one branch located in Bago Region. By the end March, 2016, authorization was received from the Microfinance Business Supervisory Committee to operate in 45 townships in Yangon Region and 28 townships in Bago Region.

Employees have chosen to work with our organization because they have job satisfaction, receive valuable training, find good working conditions and are appropriately awarded for their performance.

In closing, we would like to express our appreciation to our shareholders for their confidence in the direction we are taking, their on-going support and encouragement and our gratitude to the management and staff for their efforts that have contributed to a second year of growth. Your Board remains committed to building ACLEDA MFI Myanmar Co., Ltd. as the best MFI in the Republic of the Union of Myanmar. We have a truly excellent management team leading the MFI and, in this challenging world, your Board is confident that they will succeed.

Finally, I would like to express my appreciation to all the various Myanmar authorities involved, the general public, and all of our customers for their continued confidence in and support for ACLEDA MFI Myanmar Co., Ltd.

Significant Board decisions during the year 2015/16

  • Approved opening a staff payroll account at ACLEDA MFI Myanmar Co., Ltd.
  • Approved changing the Board of Director members, Company Secretary and Resignation of ACLEDA Bank Plc.'s Representative.
  • Approved the Financial Statements and audited Financial Statements Report as of March 31, 2015 and endorsed to the Shareholders for final approval.
  • Approved the Annual Report 2014-2015 and endorsed to the Shareholders for final approval.
  • Elected Dr. IN Channy as Chairman of the Board of Directors to succeed Mr. CHEA Sok upon his retirement and Drs. Pieter KOOI as Vice-Chairman of the Board of Directors.
  • Approved the appointment of a new Chairman and members of all Board Committees.
  • Approved changing the signatory arrangement in local currency at Myanmar Investment and Commercial Bank.
  • Approved the Business Plan Phase III 2016-2017 and the Narrative Business Plan 2016-2017 and endorsed to the Shareholders for final approval.
  • Approved amending the Terms of Reference of all Board Committees.
  • Approved amendments to Section 6.1 (o) (iv) & (v) and Section 8.2 of Subscription Shareholders Agreement and endorsed to the Shareholders for final approval.
  • Approved the Audited Financial Statements Report as of December 31, 2015.
  • Approved the reappointment of Win Thin & Associates as the external auditors on March 31, 2017 and endorsed to the Shareholders for final approval.
  • Approved the loan agreement and applications for loans from the IFC in the amount of up to Myanmar Kyats equivalent of US$ 6 million for three years.

ACLEDA MFI Myanmar Co., Ltd.'s Achievement in year 2015/16

From a performance perspective, we are pleased to report that ACLEDA MFI Myanmar Co., Ltd. has achieved a strong performance. Profit before income tax for the year-end 2015/16 was US$1,101,287 and loans outstanding were US$8,462,082 with 32,022 active borrowers. In 2015/16 net profit after tax was US$813,334. Our Head Office in Yangon and all our branches are using in-house Information Technology Systems developed by our parent company, ACLEDA Bank Plc.

In closing, I would like to express my sincere appreciation to our Shareholders for their confidence and on-going support for the Bank's efforts. As well, I salute our management and staff for their efforts that have contributed to more than three years of sustained growth. The Board remains committed to building ACLEDA MFI Myanmar Co., Ltd. as the leading MFI in the Republic of the Union of Myanmar.

Finally, I would like to express my appreciation to all the relevant Myanmar authorities, the general public, and to all of our customers for their continued support and confidence in ACLEDA MFI Myanmar Co., Ltd. and last but not least to the management and staff for their strong commitment and superior efforts to build and make ACLEDA MFI Myanmar Co., Ltd. a success.

Dr. IN Channy
Chairman of the Board of Directors


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