The UN Capital Development Fund and the UN Development Programme jointly launched the results of the Making Access Possible (MAP) Myanmar Diagnostic - a comprehensive study of Myanmar’s financial services sector and an analysis of its potential to enhance financial inclusion as the country’s economic reforms take hold.

Conducted last year the study included a survey of 5,100 nationally representative households and collected qualitative data from focus groups sessions, home visits and key informant interviews. A synthesis note summarizing the results of MAP Myanmar is now available online.

The key findings of the research reveal only 4% of respondents surveyed have bank savings accounts in their own names. About 39% of respondents had no access to wither regulated or unregulated financial services. However, high levels of usage amongst those who had access was found - 31% of respondents used unregulated and informal services such as money lenders and friends and families to borrow money. The prominent role of informal financial services points to strong potential demand for regulated services, although research also suggests that financial services and products currently available do not meet the needs of potential users.

On the “supply side”, the research featured interviews with representatives of financial services providers and government regulators. This supply and demand data has also been captured in an interactive online ‘map’ tool which was also launched.

The research also showed that 95% of the adult population earns less than US$10 per day, suggesting the majority of the population would benefit from the spread of microfinance services at the grassroots level. The findings of the study will enable Government, investors and international donors to focus efforts on areas that will ensure that the largest numbers of people benefit from the use of regulated financial services.

Despite a relatively high level of informal savings (10% of respondents said they have savings in gold, livestock or “cash under the bed”), nearly two-thirds of respondents (62%) said they do not save at all. Even with a fully functioning financial system, this affects the ability of the country to mobilize national savings for growth and development.

Business costs are high due to the largely cash-based nature of the economy and the market is further weighed down by regulations and numerous curbs on credit operations and use of largely paper-based banking systems. These inadequacies of the existing system, in terms of its rigidities, limited scope of financial products and services, and even lack of access to service providers, have clearly contributed to high usage of informal credit services in Myanmar. Compounding the situation, serious capital constraints across the financial sector limit banks’ ability to extend credit.

“Currently, financial services are at a very low level in Myanmar and this is impacting the country’s ability to harness the capital available for national development. Significant effort is required to move the country towards more formal financial services.” said Mr Henri Dommel, Director Inclusive Finance at UNCDF. “Our research has provided clear indications on where to focus efforts to develop the sector” he added. Based on the research outcomes as well as feedback from stakeholders at the conference an initial road map framework will be developed. UNCDF/UNDP hopes such a roadmap will assist the Government of Myanmar in developing policy and setting out its priorities for promoting financial inclusion in the short, medium and long-term, and in attracting development partners to assist in specific areas of financial or other need.

The MAP framework has been developed by UNCDF in partnership with FinMark Trust and Centre for Financial Regulation and Inclusion (Cenfri). The study in Myanmar has been funded by UNCDF and the multi-donor LIFT fund. The MAP process was overseen by a national Steering Committee chaired by the Myanmar Microfinance Supervisory Enterprise (MMSE), representing the Ministry of Finance, which provided invaluable guidance and support for the programme.