Overview of Myanmar’s Export Market...Factoring / Forfaiting Cargo Insurance • Letter of...
Transcript of Overview of Myanmar’s Export Market...Factoring / Forfaiting Cargo Insurance • Letter of...
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Overview of Myanmar’s Export Market
‘18 Export - GDP Ratio
21.6%Sources : https://data.worldbank.org/indicator/NE.EXP.GNFS.ZS?locations=MM ; https://www.ceicdata.com/en/indicator/myanmar/total-exports-growth ; https://www.moi.gov.mm/moi:eng/?q=news/24/07/2019/id-18523
YoY Average Export Growth
14.8%
’18 Total Export
15.4 Billion USD
Major Exports By Commodity
Major Exports By Country
CHINA - 33%
THAILAND - 18%
JAPAN - 8.3%
INDIA - 3.4%
HONG KONG - 3.4%
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Growing Demand for Myanmar products National Export Strategy 2020 - 2025 focus
Sources : https://www.mmtimes.com/news/what-expect-myanmars-top-five-export-sectors.html ; http://www.thaibizmyanmar.com/en/news/detail.php?ID=2119
• Agriculture, & Fruits and Vegetables • Digital Economy • Gems and Jewelry • Industrial Art Products
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Barriers that hinder the growth of Myanmar’s exporter market
Sources : https://www.mmtimes.com/news/what-expect-myanmars-top-five-export-sectors.html ; http://www.thaibizmyanmar.com/en/news/detail.php?ID=2119
Access to Finance
Capacity Building
Access to Data
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Financial Solutions available to Exporters
Trade Finance• Short / Long Term Loans • Offered by Myanmar local and
Foreign Banks • Need for immovable collateral /
corporate guarantees • Basis of credit is on the Exporter
Lending Facilities
Letter of Credit
Factoring / Forfaiting
Cargo Insurance
• Letter of Guarantee • Offered by Myanmar local and
Foreign Banks • Most require the ff: Bill of
Exchange, Commercial Invoice, Packing List, Bill of Lading, Insurance Policy, etc.
• Some banks still require immovable collateral / corporate guarantees
• Indemnity for unexpected loss of good during transport
• Offered by selected insurance companies
• Usual coverage are : theft / robbery
• Purchase of Invoice Receivable
• Currently not available in Myanmar • Usually Non - Recourse to exporter • 80% - 90% of the value of your
export receivable • Most require the ff: Invoice
Receivable copy and delivery documents
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Export Factoring / Forfaiting
International Factoring Member Associations
Exporter
Sells 90 day Export Invoice
Purchases Invoice at a Discount
Importer
Pays Buyer complete amount
after 90 days
Buyer
Ships products to Importer
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Cross Border Factoring Model
FCI Member Importer
FCI Member Exporter
Myanmar Exporter
Sells 90 day Export Invoice
Purchases Invoice at a Discount Myanmar FCI
Factor MemberIndia FCI
Factor Member
Guarantees Payment after 90 Days
India Importer
Pays for goods delivered
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Case Studies
Sources : https://fci.nl/en/solutions/factoring/case-studies
FCI Exporter : Egypt FCI Importer : Canada, US, Poland, Greece
FCI Exporter : Turkey FCI Importer : Germany, Czech Republic
FCI Exporter : China, Hong Kong, Malaysia FCI Importer : Germany
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Our current coverage
China Germany UK Great Britain Poland Austria Portugal
Taiwan Netherlands Iceland Belgium Denmark Netherlands Antilles
Singapore France Switzerland Hungary Finland Liechtenstein
Australia Japan Estonia Spain Slovak Republic Luxemburg
HongKong Greece Italy Ireland Sweden Norway
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Growth Points Cross Border Factoring
Improved Payment
Collection
Save on Exporting
Costs
Digitization of Manual Storage
Sources : https://medium.com/hashreader/trade-finance-an-introduction-to-the-key-challenges-8f6545771b87 ; http://www.thaibizmyanmar.com/en/news/detail.php?ID=2119 ; https://www.mingalarrealestateconversation.com/news/
Fair Credit
Worthiness
• Alternative source of working capital
• Deal with local bank in receiving payments
• Early repayment of invoice
• Basis of Credit is a combination of the exporter and the importer
• Reduce currency risks • Reduce payment
transfer costs
• Invoice Receivables and supporting documents will be uploaded and kept in an online platform for monitoring and record keeping
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