IFC Offers $3 mn Loan to SLCM Limited to Reduce Post-Harvest Losses in Myanmar

SLCM Limited, the Yangon-based subsidiary of the Delhi-based agri-logistics group- Sohan Lal Commodity Management, will now get a $3 million loan from IFC to expand its warehousing services and allied services in Myanmar, and thereby improving the livelihoods of the rural population that rely on agriculture, top company officials said.

The SLCM Group had entered the Myanmar market in 2014. The company has, so far, managed 3.24 million square feet of commodity storage space in 127 industrial zones and has handled 521 commodities with a total volume of 10.14 million tonnes.

IFC, a member of the World Bank Group, will provide the loan to SLCM through its own account and in its capacity as an implementing entity of the private sector face of the Global Agriculture and Food Security Programme (GAFSP). Subsequently, it will help attract more banks and collateral managers to engage in the business of commodity-backed financing, which is new to Myanmar.

“We have replicated our best practices and expertise in agriculture warehousing domain in Myanmar. In the past five years, we have been able to reduce post-harvest losses to 0.5 percent in the country, thus helping every player in the farm-to-market chain. We intend to utilize the capital to further scale up our operations and expand our presence here,” said Sandeep Sabharwal, Group CEO, SLCM.

Significantly, in Myanmar, despite poor storage conditions, farmers are often forced to store harvested products to sell at a later time, leading to substantial losses—currently estimated at around 20 percent. IFC’s investment will help the company bring sophisticated warehousing and allied services to Myanmar. It will further help farmers to be able to store higher volumes and reduce post-harvest losses caused by infestation, excess humidity and inadequate storage.

Vikram Kumar, Manager, IFC (for Myanmar and Thailand) said that the agriculture sector of Myanmar is one of the key pillars of the economy and provides employment to nearly 53 percent of the labor force. Further, developing this sector is the key to helping people move out of poverty. A World Bank research has shown that progress in the agricultural sector was directly responsible for at least 46 percent of the reduction in poverty during the period between 2005-2015. Interestingly, agribusiness is a strategic pillar of IFC’s work in Myanmar. IFC is a major investor in the country’s agribusiness sector and works with local food producers and the government to provide training in food safety management systems, reforming regulations, and improving the business environment in this sector. Since 2013, IFC has so far invested and mobilized over $1.3 billion in Myanmar, he said.