RANGOON — The International Finance Corporation (IFC), backed by the World Bank, agreed on Monday to provide a US$25 million loan to local leading retail outlet City Mart Holding Co., Ltd. to boost expansion of retail markets across Burma.
Win Win Tint, director of City Mart, told The Irrawaddy that the loans would be disbursed at the end of January and that the interest rate would be set “in line with international standards.”
“We’ve been trying to get this loan for the last two years, and there were many criteria we had to fulfill in order to qualify for one of IFC’s loans,” she said.
According to a City Mart press release, IFC’s financial support will help the chain construct some 20 supermarkets and hypermarkets across the country over the next three years. The funding will enable the company, already with about 150 retail outlets to its name, bring more farmers and micro, small and medium enterprises into its supply chain and distribution networks. There are also plans to open more than 50 new City Express convenience stores within the next year.
City Mart anticipates a six-fold increase in its purchases from domestic suppliers, reaching about $150 million by 2021, and hopes to create 4,000 new jobs, half of which will be for women.
“IFC’s expertise and advice on food safety, good social and environmental practices and corporate governance will also help us take the company to the next level,” Win Win Tint said.
Burma’s $12 billion retail sector is overwhelmingly informal, with formal retailers accounting for less than 10 percent of the market. “However, economic growth and the opening up of the market after decades of isolation have fueled demand for consumer goods,” read the statement.
“IFC supports the development of a modern retail sector in developing countries as it helps spur growth and job creation, develop supply chain and logistics infrastructure, and support smaller businesses,” said Vivek Pathak, IFC’s regional director for East Asia and the Pacific.
“With our global expertise and industry knowledge, we will be delighted to work with CMHL [City Mart] to improve efficiency and standards to become a model retailer in [Burma].”
Correction: A previous version of this story erroneously stated that the IFC loan would be set at a 1.3 percent interest rate, according to Win Win Tint. The City Mart director did not, in fact, provide a specific figure.
