Financial Services
From The Report: Myanmar 2019
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After several years of rapid expansion and double-digit credit growth, Myanmar’s banking sector underwent several necessary reforms in 2017 and 2018, as the Central Bank of Myanmar moved to introduce new prudential regulations and reduce overdraft lending. Although foreign banks remain prohibited from participating in retail activities, a spate of recent directives have made promising strides towards liberalisation, with foreign entities now permitted to provide import and export financing, as well as lend to local businesses – a major step forward for the development of the sector. Financial inclusion has benefitted from rapid mobile adoption and supportive policy-making. This chapter contains interviews with U Kyaw Kyaw Maung, Governor, Central Bank of Myanmar; U Thein Zaw Tun, Managing Director, CB Bank; He Bi Qing, CEO, ICBC Yangon; and U Nyo Myint, Vice-Chairman, Myanmar Insurance Association.
Articles from this Chapter
Open account: Liberalisation efforts and a focus on mobile banking are setting the stage for rapid gains in a relatively untouched market
Balanced growth: U Kyaw Kyaw Maung, Governor, Central Bank of Myanmar (CBM), on economic stabilisers and solutionsOBGplus
Interview :U Kyaw Kyaw Maung How can the CBM maintain economic stability? U Kyaw Kyaw Maung: First, it is important to note that the main cause of the depreciation of the Myanmar kyat in the second half of 2018 is the rise of the US dollar, which has had a similar impact on many other currencies worldwide. Another key reason for the depreciation of our national currency is Myanmar’s macroeconomic imbalances, particularly the relatively high trade deficit that began in 2013, which is still…
Borrowed time: Planned credit bureau to boost the borrowing capacity of both individuals and businessesOBGplus
Bank lending in Myanmar has soared since 2011, as the country’s democratic transition and economic liberalisation kick-started business and investment activities across multiple sectors. However, low credit access remains one of the most serious challenges facing businesses in the country. Limited availability of critical business and consumer data, coupled with the country’s lack of a credit bureau, has significantly dampened lending, and, while microfinance institutions (MFIs) have made major…
The merits of credit: U Thein Zaw Tun, Managing Director, CB Bank, on expanding the reach and capacity of local financeOBGplus
Interview :U Thein Zaw Tun How will the Myanmar Credit Bureau improve credit access for small and medium-sized enterprises (SMEs), and how is its rollout progressing? U THEIN ZAW TUN: Banks have been eagerly awaiting the establishment of the credit bureau for quite some time. Its beneficiaries are not only the SMEs, but the whole of society, as everyone gains a more agile banking sector and greater financial indebtedness prevention. For instance, we are issuing credit cards and personal loans…
Reaching for a rally: Looser rules on foreign ownership and efforts to encourage listing could help inject vital liquidity into the bourse in 2019OBGplus
Myanmar’s capital market has developed steadily in recent years. The Yangon Stock Exchange (YSX) welcomed its first initial public offering (IPO) in January 2018, three years after its inception, amid renewed efforts to encourage a growing base of eligible companies to list. As is the case with many young exchanges, the YSX is small and illiquid. While its listed firms have maintained profitable operations, their share prices and market capitalisations have trended downwards over the exchange’s…
Growth strategies: He Bi Qing, CEO, ICBC Yangon, on learning from examples and developing a competitive economyOBGplus
Interview :He Bi Qing What steps can the banking sector take to accelerate digital transformation? HE BI QING: The rapid development of China’s e-commerce over the past 10 years led to the introduction of mobile payment methods. In turn, the shift away from card and cash payments has produced some challenges for the banking sector. First, a large amount of funds flow to e-commerce platforms and sometimes remain sealed within those platforms. Second, traditional banks may find it challenging…
Fintech revolution: Tech solutions are driving the evolution of the sector landscapeOBGplus
Once reserved for ambitious start-ups and industry-leading tech operators, financial technology (fintech) has more recently caught the attention of major private sector firms and government planners alike, becoming a regular feature in budget speeches and strategic development plans. As fintech progressively plays a larger part in the lives of consumers, investors have quickly come to recognise its potential as a growth industry. The tech-focused Janus Henderson Global Technology Fund, for example, has expanded by more than 160% since February 2013, and grew by some 30% over the course of 2017. Fintech is rapidly advancing across an array of…
Fintech revolution: Tech solutions are driving the evolution of the sector landscapeOBGplus
Once reserved for ambitious start-ups and industry-leading tech operators, financial technology (fintech) has more recently caught the attention of major private sector firms and government planners alike, becoming a regular feature in budget speeches and strategic development plans. As fintech progressively plays a larger part in the lives of consumers, investors have quickly come to recognise its potential as a growth industry. The tech-focused Janus Henderson Global Technology Fund, for example, has expanded by more than 160% since February 2013, and grew by some 30% over the course of 2017. Fintech is rapidly advancing across an array of…
On the cusp: Private sector-led growth and more involvement on the part of foreign companies will allow the sector to reach its full potentialOBGplus
After decades of slow liberalisation, Myanmar’s insurance sector is on the cusp of a significant transformation. Several recent policy announcements indicate foreign companies will soon be permitted to conduct business in the country, more than 50 years after the sector was first nationalised. Myanmar’s 54m-strong population is almost completely uninsured, with penetration rates in both the life and general segments below 1% of GDP. While awareness of insurance benefits is low, the country’s…
Expanding access: U Nyo Myint, Vice-Chairman, Myanmar Insurance Association, on liberalising the market and increasing penetration ratesOBGplus
Interview :U Nyo Myint How does the entry of foreign insurance companies into the market impact Myanmar? NYO MYINT: The idea of liberalising the insurance market is a positive one, as foreign direct investment benefits the economy. However, Myanmar is a unique market that can be difficult to understand from a foreign perspective. Foreign participants in the insurance industry need to understand that Myanmar is complex, and consumer behaviour here is different compared to other markets in…
A welcoming time: Insurance sector to allow foreign participation from FY 2018/19OBGplus
Officials have clarified the timeline for foreign insurers to enter the Myanmar market – a move that will boost competition and penetration. In August 2018 the Insurance Business Regulatory Board (IBRB) announced that overseas insurers would be allowed to formally enter the market at some point during FY 2018/19, which began October 1. “We are planning to allow foreigners to participate in the domestic insurance market,” U Zaw Naing, secretary of the IBRB, told local media. “We will hire…
