Can mobile banking overcome Myanmar’s trust issues?

It is 5pm on a Wednesday and Yangon’s streets are at a near standstill. Sunset comes early to this city of 7.36 million.

Thankfully, since it is winter, the weather is cooler and drier than the rest of the year. So as dusk descends over some of the unruliest traffic in Asia – there are both left-hand-drive and right-hand-drive cars on the streets – Team Ceritalah has withdrawn to a cafe in the middle-class neighbourhood of Tamwe Township, just to the east of downtown Yangon.

Myo Zaw Khant is a 26-year-old banking assistant.

Despite the chaos outside, he is the epitome of cool professionalism: wearing a traditional cotton longyi and a white collarless shirt. He has a shy smile and a reserved, self-disciplined manner. ‘Ko’ (the equivalent of ‘Mr’ for young men) Khant is a native of Mawlamyine (or Moulmein), a faded port and former British stronghold some 300km to the southeast of the capital.

“I have worked as a banker for two years now. I started out as a computer technician – I’ve always liked technology and computers.”

One of four brothers in his family – and single – the Manchester United fan (he plays soccer every weekend, avoiding nightclubs) moved to Yangon nine years ago. He is very lucky in that his family bought a flat many years ago in Dawbon township in southeastern Yangon, thereby saving him from having to pay rent. He cycles to work – it is just 2km away and takes him about 20 minutes.

“I can’t afford to buy a car. Plus, I can drive right through traffic.”

Myo Zaw Khant is not the first in his family to have held down a white-collar job: “My father was a civil servant, though he is retired now and is a rice farmer. My mother still works as a tailor in the city.”

His duties as a banker go well beyond accounting.

“Besides handling cash I also help out with the bank’s technical operations, like its online banking. Sometimes I deal with technical errors and customer complaints, which isn’t so pleasant.”

Myanmar’s financial system has had its share of booms and busts. A 2003 banking crisis that led to a spate of panic withdrawals and a collapse in asset prices still looms large. However, with only 10 per cent of the country’s 53.9 million population owning bank accounts, the prospects for growth are huge. Still, trust remains a critical issue.

But could that be changing?

“Trust? I would say it’s somewhere in the middle – there are more people starting to save their cash in banks rather than at home. For me personally I am able to save US$150 a month, because I don’t need to pay the US$75 monthly rent for the flat. I put it in my account.”

A survey carried out by Visa in August 2017 across five major urban centres including Yangon and Mandalay revealed that 49 per cent of adults were interested in opening a bank account. And while Myanmar’s banks have over 1,000 branches nationwide and are planning to increase the number of ATMs to break the 2,000 mark, an alternative could spur more individuals to embrace financial services.

Enter mobile banking.

“It’s easy now – people don’t need to go to the bank all the time and I can quickly transfer money to my parents. Look!” Ko Khant says, holding up his black smartphone.

Ninety per cent of the population has access to a mobile phone and at least 80 per cent are using a smartphone. E-commerce companies like Red Dot Network – boasting more than 3,000 retailers across Yangon, Mandalay and Nay Pyi Taw – and Norwegian telecom carrier Telenor are already working with banks to profit from the vast potential.

But Myanmar, much like other Asean economies, is having to face a strengthening US dollar, the growing uncertainty engendered by a Trump-inspired trade war, as well as the possibility of sanctions in the aftermath of the bloody Rohingya crisis. Though textile exports (now worth more than US$2 billion annually) have mushroomed on the back of low salaries, the World Bank has been cautious, downgrading its growth projections for 2019 by 0.4 per cent to 6.5 per cent.


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