Burma - Banking Systems Burma - Banking Systems
There are four large state-owned banks that used to conduct all foreign currency transactions prior to recent reforms. Myanmar Foreign Trade Bank (MFTB) handles the majority of foreign currency exchanges related to trade and non-trade transactions. Myanmar Economic Bank (MEB) functions as a commercial bank accepting savings and deposit account as well as issuing loans. Myanmar Investment and Commercial Bank (MICB) services local and foreign investors. Myanmar Agriculture and Development Bank (MADB) promotes economic enterprises in the agricultural sector. As of February 2014, 15 out of 24 domestic private banks have permits to operate foreign currency accounts. In October 2014, the government of Myanmar (GOM) permitted limited banking licenses to nine foreign banks from the Asia-Pacific region, allowing each institution to set up one branch in the country and provide loans to foreign companies.
The GOM has made banking reform a top priority, but many substantive issues have yet to be addressed and the banking system remains critically underdeveloped. Around 90 percent of the population does not have access to banks. Banks operate mostly on a cash basis. ATMs are increasing in number, but occasionally lack sufficient funds. A number of domestic banks now offer ATM services to MasterCard and Visa holders and have began rolling out point of sale (debit/credit card) services. Although growing in scope, these services are largely limited to the main urban centers of Yangon and Mandalay and other major tourist zones. Banks began issuing MasterCard and Visa brand cards to domestic customers in late 2013. In 2017, two local banks began issuing international credit cards to domestic customers. Interbank loans are virtually nonexistent. Individual and business loans have terms of one year or less.
FinTech Evolution in Myanmar
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, was the first mobile financial services operator to be granted a MFS license. 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. For more information, please see the Financial Services / Financial Technology Overview. Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.