September 7, 2016 / 9:26 AM / 3 years ago

Thai finance firm Group Lease to buy Myanmar microfinance business

BANGKOK, Sept 7 (Reuters) - Thai motorcycle lessor Group Lease PCL plans to buy 71.9 percent of BG Microfinance Myanmar from Sri Lanka’s Commercial Credit and Finance PLC for an unspecified amount, to take advantage of rising microfinance demand in Southeast Asia.

Through the deal, Group Lease will expand its regional presence, adding Myanmar to Thailand, Cambodia, Laos and Indonesia, Chairman and Chief Executive Mitsuji Konoshita said at a joint briefing.

The deal will be completed shortly, pending due diligence of BG Microfinance, Konoshita said. Group Lease aims to book earnings from the Myanmar firm in the fourth quarter, he said.

BG Microfinance is a subsidiary of Commercial Credit and has operated in Myanmar for more than two years.

Group Lease is also considering joining Commercial Credit to do similar business in other Southeast Asian countries, Konoshita said.

Roshan S. Egodage, CEO of Commercial Credit, said BM Microfinance has about 10,000 customers in Myanmar where competition is relatively low given the government is unlikely to issue licences to new entrants soon.

Group Lease in a joint statement said it will buy the stake from B.G. International, an affiliate of Commercial Credit, which will retain the remaining 28.1 percent.

The Thai firm will inject $6.8 million into BG Microfinance to expand to 12 branches in Myanmar next year from three at present, Konoshita said. That should raise its portfolio to $30 million to $40 million next year, and increase monthly profit tenfold to about $200,000, he said.

Group Lease is one of Thailand’s biggest three motorcycle lessors with a market share of 10 percent to 11 percent, Konoshita said. It is market leader in Cambodia and Laos with shares of 95 percent and 40 percent respectively, he said. (Reporting by Manunphattr Dhanananphorn; Writing by Khettiya Jittapong)

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