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mobile money

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There are two sectors that are most progressing in Myanmar; they are telecommunications and financial services. The two combined, creates an exciting venture: mobile financial services.

People still have distrust for the formal financial institutions in Myanmar. Only 4.8 percent of the population has bank accounts. To get people out of poverty, financial inclusion is necessary. However, some do not even meet the minimum deposit amount to open a bank account. In fact, 62 percent of adults do not have savings in Myanmar.

Cash is still king and many prefer to load up on physical assets such as gold and gem stones. This in turn would limit the banks to lend money, fuel investment and provide job opportunities, thereby hampering economic development of the country.

Furthermore, in rural Myanmar, if people need to use the bank, many would have to travel to another town for the nearest available bank, which will cost them a whole working day, plus another to travel back. Thus, coupled with little faith in the financial sector, they are prompted to turn to loan sharks in times of need.

Mobile Money is the Key

Myanmar has the fourth fastest growing mobile market in the world, being responsible for 5% of the world’s 84 million new mobile subscriptions. Banks need to take a short cut and jump on the bandwagon to link the poor to safer and more regulated financial services. Mobile money could be the country’s best bet to reaching the unbanked and achieve financial inclusion.

In 2016, the new regulations have allowed non-bank financial providers to offer mobile money services.

What is the difference between mobile banking and mobile money?

Mobile money is different from mobile banking in that although users can perform the same transactions such as money transfers, salary disbursement, mobile phone top-ups, peer-to-peer transfers and perhaps more in the future, they do not need to have a bank account.

How does mobile money work?

Even though a bank account is not necessary, there is still an agent shop to go through. A user must still visit the nearest company agent to do any money related transactions. Cash will go to the agent and user’s account will be credited with the same amount in digital currency.

What do you need to become a mobile financial service provider in Myanmar?

As required by the Central Bank of Myanmar, the mobile financial service providers must show a minimum capital of at least 3 Billion Kyats (approx. 2.2 million USD to date) if they wish to provide mobile money services. They also need to register for a Mobile Financial Service (MFS) license, and pay an application fee of 3 Million Kyats. Additionally, unlike its customers, MFS providers must open a trust account in commercial banks in Myanmar, approved by the Central bank, and maintain 100% of liquid assets in the account.

Current situation in Myanmar

The most talked about mobile money providers in Myanmar include Wave Money – collaboration between Telenor and Yoma Bank – and True Money – partnership between C.P Group and Asia Green Development Bank. Both are bent on targeting remittances because banks could shift their focus to more profitable activities in the future.

In the end, mobile money service still has a long way to go in the country. Although it bridges the unbanked and underbanked to affordable financial services, there are still impeding factors such as limited mobile access in unbanked areas, literacy and ongoing regulatory landscape.

Hence, if these technology companies succeeded in building trust from the consumers and explaining the value of such financial platforms, people would become used to digital financial services, which in the future, could lead to beyond making simple money transfers or top-ups.

It seems that currently, early movers into Myanmar would have the advantage, as there is a competition for signing banks up for partnerships and establishing an agent network, which will be needed to extend services across the country.

The next trend in Myanmar

In the future, digitalizing financial services through mobile alone would not be enough. It is apparent that the next generation that grew up in this Information Technology age would expect more than mobile technology from financial service institutions. Hence, to get a head start, banks should also start focus on creating a seamless digital channel experience for customers in its branches.

We will be in Yangon, Myanmar this coming November, where there will be a feature of banking panel, discussing about the technology adoption in banking and financial services. Yoma Bank and KBZ Bank will also be sharing their experiences in mobile banking and digital branches, so stay tuned for more updates!

If you have any questions, leave a comment!


Being my first time in the country, I didn’t know what to expect when I touched down at Yangon International Airport (except I knew that I had to change Burmese kyats at the airport since it was not available at Changi International Airport – tip for those who are making their way to Myanmar.) I wanted to find out more about the interesting, relatively new but robust ICT market in Myanmar, by attending CommuniCast and speaking to some key stakeholders in the telecommunications market about the potential of the enterprise IoT market.

(Let me know if you/your company is interested in the Myanmar market and I’ll drop you a quick email with more information!)

1. The so-called ‘leapfrog’

Lots of articles talk about the potential ‘leapfrog‘ of Myanmar with regards to technology adoption. With connectivity and devices at exorbitant prices until a few years ago, enterprises and government organisations still relied heavily on paper and pen for their administrative work. Recently, with the entries of new telcos in the market, connectivity has become much more accessible, allowing these organisations to explore new options and enable more efficient and productive ways of managing data.


(source: http://image.slidesharecdn.com/myanmardigitalcontentoverview2014-140710024549-phpapp02/95/myanmar-digital-content-focus-on-mobile-vas-overview-2014-6-638.jpg?cb=1450951031)

The lack of legacy devices provides an interesting opportunity for these organisations to ‘leapfrog’ into technologies like Cloud and Big Data, without the usual-seen hassles of converting and maintaining compatibility with previous systems.

2. Challenges

Despite the great potential for enterprise ICT adoption in Myanmar to grow, there are many fundamental hurdles that the enterprises and solution providers face. Telecommunications infrastructure is still being developed – MPT, the country’s largest telco network, covers more than 90% of the population. There are still frequent power cuts due to depreciating power lines and surge in demands, even in Yangon – the biggest city and commercial centre – making it more risky for businesses to rely on technologies for their day-to-day operations. 4G is just starting to roll out and broadband/fiber connectivity prices still remain high, resulting in the penetration rate of less than 1% and the proliferation of satellite connectivity, especially in more remote areas.

Another challenge that ICT adoption in enterprises in Myanmar faces is the cost. While number of enterprises in Myanmar has grown tremendously over the past few years as a result of economic liberation, most enterprises remain at a small and medium size. This means that capital investment in technologies – most of which come from international solution providers – can be expensive.

The government is also considered to be lagging behind in terms of digitisation initiatives, thus enterprise digitisation usually turns to foreign investments (e.g. Myanmar Beer) or is limited to the bigger firms with capital to invest (such as banking).

On the other hand, the lack of legacy systems and experience with technologies have led to a lower level of tech-savviness in the population, compared to its neighbouring countries. This means that educational efforts need to be made in order for the enterprises to be more familiar and ready before integrating technologies into their workplace.


3. What’s next?

Enterprise technology adoption in Myanmar is definitely growing. As the economy continues to open up, connectivity and electricity become more stable, awareness on technologies’ benefits and how to use them increases, the relatively open market provides much opportunity for solution providers to not only access the market, but also provide guidance for the local enterprises wishing to learn and adopt new technologies in the near future.

Telcos have an advantageous position in the current Myanmar ICT/IoT market. They already have a strong brand recognition among both consumers and enterprises, and local enterprises prefer one-stop solution providers with local presence, making existing telcos the ideal partner for accessing the enterprise market.

Local organisations such as Myanmar Computer Federation and Phandeeyar are also helping to grow the IT workforce and helping the relevant government agencies understand new technologies such as IoT and Smart City. This will potentially help the policy-making process faster as the government looks to support the local ICT growth and developments.

What do you think 2017 holds for Myanmar’s ICT/IoT developments? Comment below.

Drop me a message (here or at dinh@industry-platform.com) if you’d like to learn more and/or discuss about ICT/IoT developments in Myanmar.

by Nguyen Dinh Viet Anh