By KHINE KYAW
He told the 4th Emerging Asia Banking and FinTech Summit 2019 on Tuesday that Myanmar had fully drawn up the road map, which would be officially launched once approved by the cabinet.
“It is now in the final stage, and we expect it to come up in the second half of this year, as early as next month,” he said.
With the support of the United Nations Capital Development Fund, the road map will aim to improve the nation’s financial sector in the next few years until 2022. It will oversee three key sectors – demand, supply and regulations.
“In our view, MAP means making access possible. We will help businesses meet their target markets, improve the whole landscape and reduce regulatory barriers,” he said.
According to the official, the road map aims to improve financial access, usage and quality of financial services to all. It will mainly focus on four areas – supporting the national financial inclusion strategy and implementation plan, elevating capacity building to enhance the ecosystem, promoting innovations via digital platforms and increasing awareness on financial education and consumer protection.
“We will increase formal financial inclusion from 48 per cent last year to 60 per cent by 2022,” he said.
The officials said all the stakeholders must work together on a wide range of affordable, quality financial services to support job creation, poverty reduction and household resilience.
“In a country like Myanmar, financial inclusion is a topic of growing importance. At the FRD, we play a supervisory role in the insurance and micro-finance sectors. We have liberalised the insurance and banking sectors over the past few months,” he said.
The government will select foreign insurers to form joint ventures with local providers under a 35 per cent ownership cap. Insurance providers need to invest 30 per cent of the US$14-million (Bt438million) licensing fee in government bonds. The move will provide a boost to Myanmar’s economy and spark further investor interest.
Fintech has been identified as an effective vehicle to drive true financial inclusion, given the rapid mobile penetration rate in Myanmar. Within the next two years, telcos are expected to cover more than 90 per cent of the population.
This increased data and online access will continue to pave the way for more innovation and opportunities.
Myanmar is uniquely positioned to achieve large-scale financial inclusion with the aid of the mobile revolution, the official said.
“In Myanmar, fintech companies and corporations are contributing to the nation’s rapid development, and the increasing smartphone penetration will offer low cost, user-friendly digital financial products,” he said.
He sees rapid advancement in technology changing the way of financial products, and Myanmar’s financial industry gradually growing by utilising new fintech solutions.
“The capital market is something lagging behind due to Myanmar’s business tradition,” he said.
The official said Myanmar would also control the licensing of new mobile financial services. To date, 181 companies are officially providing mobile financial services in the market.
“Every month, we receive around 10 new applications for mobile financial service licences. We are reviewing them in line with our policies for poverty reduction,” he said.
“In the past, the minimum capital to establish an MFI was only 3 million kyat (Bt614,000). Now, we have raised it to 100 million kyat for non-deposit-taking MFIs and 300 million kyat for deposit-taking MFIs. But we still have some restrictions for deposit-taking MFIs. For example, they are not allowed to take deposit from the public. Instead, they are permitted to get deposits from their corporate partners.”
The official insisted that Myanmar does not allow shadow banking to prevent conflict of interest between banks and mobile financial services.
Speaking at the conference, Chelsea Phua, partner and head of technology and fintech at Klareco Communications, said she believed the banking and insurance sectors are able to leverage technology and new regulations to change the lives of millions in a positive way, given the rapid digital transformation of Myanmar’s economy.
“Sound business strategies, an understanding of market needs and the ability to communicate these strategies and impact will enable companies in these sectors to ride the momentum,” she said.
Phua said clear and effective communication to targeted audiences could help companies build trust with their stakeholders, rise above the competition and become leaders in their fields.