Myanmar: A burgeoning entrepreneurial ecosystem

A bit more than a decade ago, buying a cellular SIM card in Myanmar cost US$3,000 in 2001 and $250 in 2013. Fast forward to April 2019, and you can purchase a starter pack for as little as $1.10. And this is only one of the changes afoot in Myanmar, where local and international entrepreneurs are eager to capitalise on the recent liberalisation of the market.

Myanmar is a fast-developing economy, and things are changing rapidly. According to the World Bank, mobile phones have seen the most accelerated growth of all consumer goods. In 2017, nearly 40 million people lived in households that owned a phone, and, of these, 36 million lived in households with smartphones. With over 80 percent smartphone penetration and 45pc of the population being under 25-years-old, the country is fertile ground for entrepreneurship.

All of these developments make for a burgeoning entrepreneurial ecosystem. The excitement and passion in Myanmar’s entrepreneurial community are palpable, with startup competitions and boot camps cropping up across the country.

People across the country are eager to start businesses and build solutions to create a better future for themselves and their families. While the vigour is present and the opportunities to make a difference are plenty, the know-how to implement these solutions isn’t always there. Hard and soft skills needed to leverage the newfound connectivity are in short supply. This means that finding talent is often a cumbersome and time-consuming process for companies. Many employees need a lot of hand-holding and training on the job, which not many startups are able to offer.

There are plenty of other challenges too. Infrastructure is still lacking. Funding and mentorship are hard to come by. Banking is under-developed and electronic payment methods are close to non-existent. Payment gateways remain a stumbling block. This is why fintech – financial technologies – is one of the most exciting sectors in Myanmar, especially since traditional banks are not ready to service the needs of the new generations.

“There is still a lot of work to be done in founder capacity building and access to funding. The latter is improving. We have seen an increased interest in the country from international investors, but the capital available is still not enough. At QuicKyat, we believe that the fintech ecosystem needs to change. We use data from a customer’s smartphone to build a credit profile and disburse loans in hours at a fair rate,” said Luis Rodrigues, CTO at QuicKyat.

Much of Myanmar’s population is young. According to the results of the 2014 census, youth ages 10-14 constitute the country’s largest population group, with the median age of the country being 27. About 55 percent of Myanmar’s 51.5 million citizens were below the age of 30. This makes many of the entrepreneurs in Myanmar young as well. While they are passionate, many lack the necessary education, skills, and experience, which can make it hard for investors to decide to back them.

“A lot of the strongest businesses we see are expat or repat-driven, which, while terrific for creating those success stories that will further catalyse the ecosystem, also underlines the need for increased access to education, training resources, and knowledge-sharing locally,” said Rosie Keller, regional manager for Asia at Seedstars.

Despite the challenges, the startup ecosystem is booming. Seedstars, for example, has been involved in sourcing, screening and supporting tech entrepreneurs in Myanmar since 2016.

Seedstars World is looking for smart startups that solve regional issues and develop profitable and viable products for the global market. Seedstars World is the world’s largest startup competition in emerging markets. Its goal is to place the spotlight on entrepreneurs from emerging markets, especially targeting solutions that align with the UN Sustainable Development Goals.

At Seedstars Yangon, startups had a chance to present ideas to combat local challenges: such as Neh Thit by providing a chatbot based job platform for low-skilled workers, Kargo, a trucking platform that simplifies the process of moving goods for companies and SMEs by aggregating their fleets on its integrated platform, InstaCash, which reduces interest rates, and startups that try to empower and educate farmers (Greenovator and Agtrade). ShweLan’s immediate focus is to provide SME-friendly working capital through supply chain finance, including invoice discounting, purchase order financing, distributor financing, and light-asset financing.

ShweLan seeks to address the lack of financing for MSMEs within Myanmar, with banks typically only lending against real estate as collateral and MSMEs virtually excluded from the credit market. This lack of finance suppresses the growth of enterprises that support a large part of Myanmar’s population, including the poor, women and other disadvantaged groups. ShweLan relies on the network, insights and propriety tools provided by Seedstars Group which operates similar businesses in other geographies.

QuicKyat is another Seedstars Portfolio company based in Myanmar. The company has built a mobile app that makes loan application quick and simple. Its proprietary credit scoring algorithm leverages on non-traditional data collected from cell phones, social networks, and psychometric traits to calculate the probability that the borrower will pay back a loan. This process is fully automated, and the loan is disbursed to the consumer within seconds.

There have been a number of other acceleration and mentoring programs launched to provide entrepreneurs with training. One example is Phandeeyar, which the Silicon Valley-based philanthropic investment firm Omidyar Network supported with a $2 million grant towards a nonprofit social impact accelerator. EME Myanmar is an early stage venture capital firm founded to spur sustainable growth in one of Asia’s last frontier markets.

Whatever the future holds, startups in Myanmar have a chance to make a real difference. Entrepreneurship, in countries like Myanmar, can serve as a massive force for positive change.

When problems in education, healthcare, agriculture, tourism, and government, need to be fixed, startups can take on the leading role in problem-solving. This is when entrepreneurship and technology have the potential to change lives.

“By bringing expertise and investors to the country, we can create value and support the local ecosystem’s development,” said Adriana Collini, Seedstars senior investment associate.

Source: Myanmar Times

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