AMCHAM Financial Services Forum

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1 AMCHAM Financial Services Forum

2 Agenda KBZ Bank s Brief Profile KBZ SME Banking Credit Products Portfolio Credit Policies and Procedure Loans Portfolio

3 ASEAN Banking Integration Framework (ABIF), Mar 15 Banking and Financial Institutional Law

4 Kanbawza Bank Limited (KBZ Bank), established in 1994, is the largest privately owned bank in Myanmar and the first bank in history to have international representative offices. It is the most profitable bank in the country and has been conferred as the highest tax payer for the last five years. With the largest retail network amongst the private banks (currently at over 480 branches nationwide), it holds the widest reach in the country, making it Myanmar s leading trusted financial brand. KBZ has always served an important role in building the local communities by providing much needed financing to SMEs in the country. KBZ provided about 40% of total loans in FY16/17 making it the largest lender. This speaks volumes of KBZ s ongoing dedication to strengthen Myanmar and its people. KBZ is also committed to continuously improving the quality of its financial services by investing in world class innovative technology and excellent banking services. KBZ will continue to play its role in shaping the nation and supporting the local communities by combing commercial pursuit, fair business ethnic and socially responsible behavior.

5 KBZ Bank s Key Achievements

6 KBZ Bank s Growth Rate

7 Corporate Social Responsibility (CSR) ASEAN Banking Integration Framework (ABIF), Mar 15 Banking and Financial Institutional Law

8 Corporate Social Responsibility (CSR) ASEAN Banking Integration Framework (ABIF), Mar 15 Banking and Financial Institutional Law

9 Corporate Social Responsibility (CSR) ASEAN Banking Integration Framework (ABIF), Mar 15 Banking and Financial Institutional Law

10 KBZ SME Banking - Goals To facilitate complete and comprehensive banking solution to meet our customers evolving needs in order to prosper their businesses and then boost the nation s economy To support young and start up businesses with the help of the advisory and financing solution to promote young entrepreneurs in Myanmar To provide financial literacy training, business matching, tailored banking solution to woman business owners in order to bring large rewards and to avoid gender inequality in the business climate in Myanmar To assist and help SMEs in rural area with total banking solution by leveraging our extensive branch coverage and retail network To facilitate business matching to our SMEs through our customer base in Myanmar and our correspondent banks oversea

11 SME Banking Segment - Definitions Micro Business Small Business Mid Sized Business Industry Head Count (#) Paid Up Capital (mil MMK) Last Year Turnover (mil MMK) Loan Amount (mil MMK) Up to 5 Up to 50 - Up to 50 Manufacturing Up to 50 Up to Labor Intensive Manufacturing Up to 300 Up to Wholesale Up to 30 - Up to 100 Retail Up to 30 - Up to 50 Services Up to 50 - Up to 100 Others Up to 30 - Up to 50 Manufacturing Labor Intensive Manufacturing Between 51 and 300 Between 301 and 600 Between 500 and 1,000 Between 500 and 1,000 Wholesale Between 31 and 60 - Between 100 and 300 Retail Between 31 and 60 - Between 50 and 100 Services Between 51 and Between 100 and 200 Others Between 31 and 60 - Between 50 and 100 Between 50 and 100 Between 100 and 500

12 SME Banking Segment Credit Products Portfolio Working Capital Financing CAPEX Financing In Pipeline Overdraft (OD) Terms Loan Supply Chain Financing Warehouse Financing JICA Two Steps Loan Franchise Financing Trade Financing Vehicle and Asset Financing Commercial Property Financing Agricultural Financing

13 SME Banking Segment Credit Policies & Procedures Learning Curve Question to customer! NO Reliable Financial Statements NO Business Plan Limited access to credit NO Collateral Better understanding of the borrower s capacity to repay Financial statements Less reliance on the collateral Better and faster access to credit Help to develop SME entrepreneurs into better businessmen Business plan

14 SME Banking Segment Credit Policies & Procedures More SME Credits Less reliance on Collateral Know the Customer Know Your Customer (KYC) Analysis of Financial Data Identify the Sources of Repayment Collateral as Secondar y Source Cash Flow as Primary Source Understand Business Plan Know the Financial Condition

15 SME Banking Segment Credit Policies & Procedures Lending Type : Secured and partial secured credit Interest Rate : 13% p.a Tenure: up to 5 years Collateral Type : Land & Building Machinery Inventory Credit Guarantee Insurance Scheme Standby LC/Bank Guarantee

16 SME Banking Segment Total Loans Portfolio # of Accounts Amount (mil MMK) SME Corporate # of Accounts Amount (mil MMK) SME 85% 14% Corporate 15% 86% Total Loans Portfolio 100% 100%

17 SME Banking Segment SME Loans Portfolio 1,050,000 9,000 1,040,000 8,900 1,030,000 8,800 8,700 8,600 8,500 8,400 8,300 8,200 8,100 8,000 # of Accounts 1,020,000 1,010,000 1,000, , , , , ,000 Amount (mil MMK) Overdraft (OD) Term Loans JICA Two Steps Loans

18 SME Banking Segment JICA TSL Loans Portfolio % of Contribution by Geo, JICA TSL 3% 3% 1% 12% 8% 40% Yangon Shann Magwe 13% Sagaing Mandalay 20% Bago Ayeyawady Mon

19 SME Banking Segment JICA TSL Loans Portfolio % of Contribution by Industry, JICA TSL % of Contribution by Gender, JICA TSL 9% 3% 0% 14% 28.9% 74% 71.1% Manufacturing Trading Transpotation Service Construction Male Female

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