This is a best prospect industry sector for this country. Includes a market overview and trade data

Overview
Financial inclusion is one of the top priorities for the Government of Myanmar as the country moves ahead with its economic transition.  Myanmar, a country where cash is still king, has experienced drastic technology-led changes in its banking and finance sector over the years.  People are gradually moving away from keeping and saving cash in their homes and moving towards saving money in banks and using cash cards, such as ATM cards and Myanmar Payment Union (MPU) cards.  (MPU is the national payment network).  In addition, the mobile phone connectivity rate reached 95 percent in 2019 from less than 10 percent in 2014.  The significantly increasing mobile phone connectivity and internet penetration enable people in Myanmar to access the digital financial services via mobile technology such as mobile applications and web platforms.  The percentage of the country's population that has a bank account remains under 20 percent.

In March 2016, the Central Bank issued a regulation on “Mobile Financial Services” (MFS) to create a safe mobile financial services regulatory environment in Myanmar.  Mobile network operators and non-bank financial institutions can now apply for an MFS license to provide electronic money transfer and other tech-based financial services within the country.  Wave Money, a joint venture company between Norway’s Telenor, Yoma Bank and First Myanmar Investments, is the first mobile financial services operator to be granted MFS license to develop mobile money transfer platform. Platforms, such as Wave Money, allow workers to transfer money to their families in rural areas via its money transfer application. Then funds can be collected before or after normal banking hours at mom-and-pop shops across the country, forming a virtual “human” network of “ATMs.”  

ASEAN countries such as Singapore and Thailand have already made inroads in Myanmar’s Financial Technology (FinTech) sector and have formed partnerships with local FinTech companies to provide tech-based financial services.  A well-known Singaporean payment services provider and MPU developed the first E-commerce payment platform to directly settle payment for online purchases.  A Thai e-wallet startup has signed a joint venture with a Myanmar retail chain to launch an e-wallet service that will enable online shopping and self-check-outs.

Leading Sub-Sectors
Electronic payment services and mobile wallets are currently two of the most promising FinTech sectors in Myanmar.  Currently, there are at least ten FinTech companies providing online banking, mobile phone top ups and various e-bill payment services. Myanmar businesses and consumers are rapidly adapting to FinTech due to increasing smartphone and internet penetration.  Given the large unbanked population, smart phone applications are an efficient way to “leapfrog” to a higher level of service, skipping the holding of a bank account at a physical location, to provide digital financial services to citizens who live in rural areas.  The current FinTech hub is Yangon, Myanmar’s financial capital.

As financial solutions and services move from manual to digital, both financial and non-financial institutions in Myanmar are spending a great level of investment and attention to digital security.  Due to potential data breaches and monetary losses, FinTech firms are using advanced cybersecurity solutions to prevent cyber-attacks and reduce reputational risk.

Opportunities
The GOM aims to reach 40 percent of the total population, including the currently unbanked population, through financial services delivered via mobile technology through 2020 and targets 15 percent of the total population to use more than one type of financial service.  This ambitious target creates opportunities for both domestic and international FinTech firms to serve the unbanked population; the traditional local banks still have not reached some rural parts of the country due to the lack of banking infrastructure.   According to the McKinsey Global Institute, financial inclusion is essential to economic development in emerging markets such as Myanmar.  Widespread implementation of digital finance systems could increase the GDPs of all emerging economies by 6 percent, or a total of $3.7 trillion, by 2025.

Contact Information
U.S. Commercial Service Myanmar
Ms. Ummay Aiman
Commercial Specialist
Email: Ummay.Aiman@trade.gov

 

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