As Myanmar modernises its financial sector to better serve its economy and people, a growing opportunity to extend financial services to the majority of its people has opened up. MAP found that 30% of the 39 million adults use regulated financial services, but only 6% use more than one service. Fewer than 5% of adults have bank accounts. The majority of citizens rely on unregulated providers or family and friends to meet their need for financial services. The cost of services provided by unregulated providers is usually substantially higher than those offered by regulated providers. MAP also found that rural areas are slightly better served than urban areas. This is the result of targeted credit provision to rural areas by state financial institutions coupled with a nascent commercial banking sector. Microfinance institutions, operating under a legal framework since 2011, have made some headway and currently serve 700 000 clients.

Through its in-depth diagnostic analyses, MAP identified seven priority opportunities to extend financial access to the people of Myanmar:

• Dramatically increase the supply and availability of electronic payments. This can be delivered through mobile payments platforms and also through electronic payments networks developed by commercial banks.
• Provide low-cost savings vehicles for short term saving. Emerging retail payments networks and agents can be leveraged to enable convenient store of value services.
• Extend the availability of account-based savings options. This will require an improvement in transaction functionality and proximity to entice savings into the regulated sector. While there is an urban opportunity for bank-based deposits, the modernisation of MEB’s systems offers a major opportunity to strengthen its role as savings mobiliser in both urban and rural areas.
• Improve the quantity, terms and risk profile of agricultural input credit. MADB will play a leading role here, but there is also opportunity for agricultural input providers and MFIs.
• Increase the availability of unsecured credit. There are opportunities to increase the lending of providers permitted to extend loans without collateral, such as MFIs and co-operatives. There is also the option to relax the collateral requirement for personal loans once a credit bureau is in place.
• Grow the insurance product portfolio to meet the risk mitigation needs. There is a large opportunity to provide regulated insurance for especially health and life, mostly funeral, risks. This will require regulatory adjustments to allow both MIC and new private insurers to offer such products.
• Develop insurance products to provide security for credit extension and protection of consumers, particularly for agriculture. Insurance can take the place of collateral for credit extension, especially for agricultural input credit. This will require the development of appropriate products.