Tech revolution: Mobile banking is prioritised under financial inclusion strategy


Mobile banking has been a key factor in the recent improvement of Myanmar’s financial inclusion rates. Following the liberalisation of the telecoms industry in 2014, the country has seen a surge in mobile phone ownership, partly as a result of cheaper data and better network competition, making it an effective channel for financial services and products.

The country’s electronic payments gateways and regulations have been playing catch up with this development, at times struggling to keep pace with the services offered by a range of new financial technology start-ups, as well as with innovations in existing banking and microfinance entities.

Mobile Myanmar

ICT market liberalisation in 2014 propelled rapid market change. First, the cost of SIM cards fell to around 1% of their 2013 price, which led to the SIM penetration rate rocketing to 105% by May 2019. Alongside this, smartphone penetration had reached 80% by 2018, higher than in the US, where it was around 77%. Data and call price rates have also plummeted since 2014, although they remain higher than in other countries in the region.

Myanmar ranked 43rd out of 61 countries in the Alliance for Affordable Internet’s 2019 global tables. Indeed, 4G is now widespread across the country. Around 90% of the population is covered by some kind of mobile network, and 50% have access to a high-speed internet connection.

The government and the Central Bank of Myanmar (CBM) have developed two financial inclusion roadmaps since 2014 that set targets to improve access to the formal financial sector for citizens and businesses. Digital financial services have been a key element of this strategy (see analysis).

Bank Adaptation

Two strategies have emerged among Myanmar banks in response to these changes. “One way is to blanket the country with branches and ATMs,” Jason Loughnane, head of digital credit at Yoma Bank, told OBG. “The other option – which we have opted for – is to rely on Wave Money agents and affiliated shops to provide cash and account services.” Wave Money, a joint venture between Norwegian telecoms firm Telenor and local Yoma Bank, offers transactions via mobile phone or via human contact points – a network of agents in the country where users can deposit and withdraw cash. By mid-2019, 11m people had used the service in Myanmar, supported by a network of 45,000 agents, enough to cover about 89% of the country’s territory. In the first half of 2019 alone it processed MMK2.6trn ($1.7bn).

Other similar facilities also exist, such as M-Pitesan, a joint venture between Qatari telecoms Ooredoo and local CB Bank. KBZP ay is a mobile wallet developed by KBZ Bank, Myanmar’s largest privately owned bank. Other players include TrueMoney, which also undertakes international transfers via a tie-up with AGD Bank; OK Dollar; and Ongo, which has a more business-to-business focus.

Further Developments

The country’s payments system has been trying to keep pace. In April 2019 the Myanmar Payment Union – which provides bank card services and partners up with 23 local state and private banks – signed an agreement with Singapore’s Network for Electronic Transfers to help roll out unified QR codes in Myanmar. The CBM was also working to implement this by the end of 2019 using UnionPay International’s QR code system. The use of QR codes is key to further interoperability, enabling cashless payment in a variety of contexts in a country that remains highly cash-centric. In 2019 the lack of interoperability between mobile money providers was also a restraint on further market growth. The move towards a more cashless society appears set to continue apace, with a number of new projects in the pipeline. For instance, there are plans to utilise the existing customer bases, such as those using services like Wave Money, to develop credit scores. This would be a vital step in widening access to credit.