Myanmar: Adjusting for growth in the financial sector
Friday, June 20, 2014
Authorities in Myanmar are determined to foster economic progress and have placed financial inclusion on their list of priorities. In an attempt to tackle demand for increased financial services, Myanmar has taken numerous steps in the past 24 months, such as the adoption of a floating currency, liberalisation of the insurance industry and the independence of the Central Bank of Myanmar (CBM). Following these adjustments, 2014 is set to see the CBM grant operating licences to foreign banks, while 2015 has been set as the target date for the establishment of the Yangon Stock Exchange.
The unbanked population
According to a recent joint study by the UN Capital Development Fund (UNCDF) and the UN Development Programme called Making Access Possible (MAP), only 4% of families surveyed have bank accounts in their own names, 39% have no access to any kind of financial services while 31% opt for unregulated financial assistance such as money lenders or borrowing money from family or friends. Sponsored by the UNCDF and the multi-donor Livelihoods and Food Security Trust Fund (LIFT), the 2013 MAP survey covered 5100 households and suggested that while there is strong potential demand for regulated services, current product offerings do not match the needs of the unbanked population.
Microfinance initiatives are being undertaken to address the issue, and U Maung Maung Thein, the deputy minister of finance, announced at the Financial Inclusion Roadmap Conference in Nay Pyi Taw in May that the ministry aims to increase the banked population from 30% to 40% by 2020.