1.7 billion people are unbanked, globally. In Asia alone, less than 27% of adults and only 33% of enterprises have an account or a line of credit or loan from a financial institution respectively.
The World Bank Global Findex reported that emerging Myanmar has only 26% of the population banked. Recently, Myanmar has benefited from leapfrogging technology cycles and widely recognized as one of the last true frontier economies. 8.8 million of the population in Myanmar own a business. Yet 56% of these enterprises do not have a savings/checking account and only 7% of small enterprises have a line of credit. According to a UNCDF study, 52% of businesses identified access to finance as an obstacle. The low trust and penetration of traditional banking methods in Myanmar is particularly chronic in the low income and rural areas where 70% of the population still reside.
Therefore, Myanmar presents tremendous opportunities for microfinance to be an enabler of sustainable poverty reduction, wealth creation and economic progress. Myanmar’s microfinance scene is nascent but rapidly developing. As of 2018, IMF data showed that there were 176 MFIs in Myanmar (101 local agencies, 26 NGO/ INGOs and 49 partnerships) with capital totalling $420 million available to 2.7 million people. This is double the amount and reach in 2016. Regulations passed in 2016 and 2017 to support the 2011 Microfinance Business Law have been positioned to be a catalyst in the development of the microfinance sector. For instance, the credit reporting system regulation issued in March 2017 has paved the way for the establishment of a credit bureau, to help banks better assess to collaborate with MFIs and facilitate credit access This upward momentum is part of efforts in the Myanmar Financial Inclusion Roadmap (2014-2020) where one of the targets was to increase formal financial inclusion to 40% by 2020.
It is estimated that $190 billion could be generated in the microfinance and banking sector by banking the unbanked adults and businesses in Asia alone. Myanmar, as one of the emerging Asian economies with much catching up to do vis a vis the other Asian countries, could potentially capture a sizeable portion of this multi-billion dollar pie.
This conference is jointly developed in special consultation with the Myanmar Microfinance Association through the formation of a special Conference Comittee.
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