Htet Tayza: Myanmar

A recent article on Forbes, a global business publication, argued that the rapidly-emerging financial technology (fintech) sector has the potential to transform Myanmar’s financial landscape.

Changing landscape

In 2013, CNN argued that Myanmar’s banking system is “outdated” and is “shunned by about 90% of the population.” Commenting, Brad Jones, the CEO of mobile financial services provider Wave Money, said that the nation’s “banking system does not cater to the mass market.” Myanmar’s citizens typically distrust banks, so many choose to keep money at home, limiting the growth of the sector.

But the situation is changing, if slowly. Recently Myanmar Payment Union’s CEO, U Zaw Lin Htut, suggested that Myanmar is embracing credit cards. Explaining, he said that citizens are using these cards more, as they are “finding it increasingly convenient as the number of stores that take cards increases.” Also due to top-down regulatory pushes, many Asia-Pacific nations are turning themselves into cashless societies, meaning that mobile payments could rise in these territories going forward.

Gap in the market  

Meanwhile, fintech platforms such as Wave Money are democratising financial services Myanmar. It is important to note that in 2014, Myanmar had a mobile penetration rate of 10%. This has since climbed to 50%, with 80% of first-time buyers opting for smartphones. This means that more consumers can access online financial services on the go, making them more popular in Myanmar.

Increasingly, people in Myanmar are moving to cities, to find work. Expanding, Jones said that “as people move… they need to send money home,” to support their families. Citizens can only transfer money home at traditional banks during operational hours and this process can take hours, making it difficult. This presented a gap in the market for Wave Money to fill. Elaborating, Jones noted that “we saw an underlying need for money transfers that are available seven days a week, around the clock.”

Wave Money launched its mobile money transfer platform in August 2015. It now has 100,000 users, who can transfer cash via their smartphones. Citizens pay nothing to sign up or for user-to-user transfers, although Wave Money charges a small percentage fee on cash-outs. Jones said that app-based transfers are popular with users and 70% of the service’s activity takes place outside of standard banking hours, promoting financial inclusion, which is critical in emerging markets like Myanmar.

Promoting financial inclusion

According to the McKinsey Institute, digital finance systems “could increase the gross domestic products of all emerging economies by 6%… by 2025.” Omidyar Network Investments Principle Ameya Upadhyay argued that “financial inclusion leads to increased household welfare and macroeconomic welfare.” In Myanmar, digitisation could supply millions with secure, regulated, reliable financial services, reducing reliance on unregulated lenders, who charge monthly interest rates as high as 10%.

Continuing, Upadhyay said: “Usually the pattern taken by these markets is that mobile financial services start with payments… Payments form the first backbone of financial inclusion.” Once customers see a firm’s record for reliability, they will be more willing to save and invest with them later on.  Also by utilising mobile payments, Myanmar’s consumers may find it easier to execute transactions on time, building up positive financial records, which make it easier to secure credit.

Upadhyay suggested that fintech bodies need to set up trusted distribution networks, build consumer trust and educate citizens on their platforms. Commenting, she noted that “where Myanmar can leapfrog other markets is by providing other use cases,” to foster consumer trust. She argued that the adoption of fintech products will rise throughout Myanmar, as consumers see their benefits, fostering financial inclusion, although the necessary platforms must exist for this theory to play out.

Streamlining services

One platform which is catering to evolving consumer needs is ConnectNPay (CNP), which helps Myanmar’s banks and utilities suppliers digitise their payments facilities. Speaking out, CNP Advisor Patrick Kershaw explained that the firm’s aim was to develop a digitisation and aggregation platform, which would enable service providers to supply more efficient services to consumer.

CNP developed a billing system for The Yangon City Development Council which generates 10m bills per year, while lowering billing cycles to six days, down from 62 days. Elaborating, Upadhyay said: “Because of the work CNP is doing, allowing people to make payments of their council tax – if a fintech start-up can allow people to pay their taxes more easily, that can increase the tax revenue of the government, reducing fiscal deficit and improving the balance sheets of the exchequer.”

Kershaw added that CNP is committed to transparency, so it can overcome consumer hesitance to embrace new platforms, a problem which Wave Money has experienced. CNP offers flat rates for clients and distributes performance figures, to engender trust. CNP is partially based in Singapore, but hopes to move all its operations to Myanmar by next year. Going on, Kershaw said that “we’re trying to be an enabler, we’re trying to build the core building blocks so the economy can emerge.”

Microfinance development

Forbes wrote that microfinance is also vital to economic development. Explaining Bagan Capital, which supplies microfinance loans to small firms, CEO Jeremy Kloiser-Jones said: “Microfinance is significant in ensuring that economic growth provides benefits for the general population and not just for those at the top… As the fastest growing economy in the world … there is a huge need for credit to help ordinary Myanmar citizens grasp the opportunities to grow their businesses, or start new ones.”

Kloiser-Jones observed that microfinance is really important for Myanmar’s women, as stable government jobs typically go to men. Most of his firm’s loans go to women, allowing them to purchase supplies for their businesses. Microfinancing helps Myanmar’s women build successful companies, giving them the financial stability required to invest in their children’s well-being and education.

Bagan Capital still uses cash for the majority of transactions, but this is soon set to change. Going on, he explained: “Digital money in Myanmar is still in its infancy, but we are assessing product offerings and will integrate cashless transfers into our operations in the near future… The incredible growth in telecommunications infrastructure and smartphone penetration has now made this a realistic tool.”

Preparing for the future

Forbes showed that Myanmar’s consumers are increasingly embracing fintech and that the financial industry is attempting to acclimatise itself to this fast-emerging trend. Commenting, Kloiser-Jones noted that “all parts of the Myanmar financial system are trying to develop simultaneously, as everything is starting from a low base,” with Kershaw adding that the rate of change is unprecedented in a nation which only re-opened itself to foreign investment during the past ten years. In this uncertain climate, Myanmar’s financial industry is gradually learning how, by utilising new fintech solutions, it can increase consumer engagement with its services, driving itself forward in future.

Htet Tayza.


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  1. […] Red Dot Myanmar and Ascend Money could help boost the nation’s economic fortunes. Fintech could drive Myanmar’s financial sector forward in a number of ways. It is important to note that payments form the backbone of financial […]


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About Htet Tay Za

My name is Htet Tay Za and I’m a young banking professional from Myanmar. I was born in Yangon, Myanmar twenty-four years ago. I have a keen interest in business, cuisine, lifestyle and philanthropy.


Finance, financial services, fintech, Htet Tayza, htoo htet tayza, Myanmar


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