Had a great dinner with a group of ex-colleagues last night. We last had one about 4 months ago and the theme was : great food and whisky. Since then, our in house chef had perfected the sous vide process and seared a fantastic tenderloin plus a rack of lamb last evening. We also had Jamon with melon, freshly shucked oysters, pate, cheese, salami and assorted cans of octopus, mussels and sardines. All these rich foods with multiple shots of fine whisky : a wonderful dinner with good friends indeed.
I had a call from an ex-colleague last week. He was coming to S’pore this week for a seminar and suggested that we meet up for a possible business opportunity. He has just become the CEO of the micro finance arm of one of the largest agriculture groups in Myanmar.
In my previous job, the company was a fully owned subsidiary of one of the largest sovereign funds in the world. Our mandate was to invest in Financial Institutions in Emerging Markets. In my 3.5 years there, we have been very bullish on Indochina and I had made numerous trips to Vietnam, Cambodia and Myanmar.
We started new micro finance NBFIs (Non-Bank FIs) with JVs between some of the top onshore FI partners. We made it a point to staff the new companies with local people as much as possible while we provided support and expertise on a consultancy basis. I was helping to develop the treasury expertise, set up the ALCO framework and help them to seek new funding from banks. It was very rewarding to see our value add to the enrichment of the lives of the common people, as we provide credit to the persons who need them most.
The farmers, wet market vendors and provision shop owners needed small loans of a few hundred dollars up to a thousand dollars in order to grow their business. This segment normally does not have access to credit lines at all and even if they manage to get it, interest charges are exorbitant (> 50%p.a.), making their business even harder to succeed. We created a structured framework at a lower cost for them to borrow via transparent processes, either with or without pledged collateral. Seeing the country progress, as its middle class grows with our help, was a way we could give back to society. We were able to use our financial strength and reputation as a sovereign fund to breach the gap between the individuals’ demand for loans and the banks which we had access to. With our past experience in the evaluation and credit scoring of the micro finance sector in Indonesia, China and India, we were able to make a business case for each project.
Met my ex-colleague on Thursday for lunch and he expanded on his proposition. He was a month into his new CEO role and he was looking to set up his advisory committees to run the micro finance arm effectively. Having worked with him for a few years, he was comfortable about introducing me as an advisor for his ALCO team. I mentioned to him that I was keen to explore further as I was also looking to do something different now. As a next step, he will introduce me to his boss and this may result in a trip to Yangon next month. Let’s see how all this will develop and play out.
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