Daung Capital, Myanmar-based micro-credit loan provider, announced that it has closed its Series A round a valuation of S$16.5 million (US$12 million).

Daung Capital managed to grab investment from Singapore-based venture capital firm Majuven. This is Majuven’s first investment into Myanmar.

According to the data shared in Daung Capital’s official statement, Myanmar’s rural nature, coupled with conservative family-owned banks, results in only 26 per cent of the population having a bank account while less than 1 per cent owning a credit card.

This lack of access to credit means that most Burmese are not able to get proper transport to reach better jobs, causing them to borrow from loan sharks at 10 per cent a day to buy food or medication just to get by.

Daung Capital believes that by providing micro-credit loans, it may bring the financially excluded access to credit. This approach, according to the company, would be the most effective way to fight income inequality in Myanmar. It also helps to create a sustainable business to help others out of poverty.

Also Read: Tech-enabled veggie hawker startup Kedai Sayur secures US$1.3M funding

Prior to this funding, Daung Capital was backed by Bod Tech Ventures, founded by Burmese entrepreneur Mike Than Tun Win.

“We will seek to find further partnerships to expand our footprint, extend our line of loan products with a strong emphasis on a double bottom line and disrupt the pain points of traditional lending through our technological capabilities,” the company stated.