How Myanmar could capitalise on the millennial market

Yangon based youngster, Nicky Min Ye Myat, does his shopping online. He’s 28 years old and following the global trend for Millennials to do most of their business over the internet.

He is a personal trainer and finds the selection and prices online better than the clothes available in the local shopping mall. Using popular ecommerce platform Alibaba Express, Nicky can find what he wants, quickly and easily.

Continue reading…

Government assistance for accessing business loans

A scheme to help small and medium-sized enterprises (SMEs) apply for a bank loan in Yangon is set to launch after data collection is completed.

Announced at the Myanmar Federation of Chamber of Commerce and Industry (UMFCCI) in August by Yangon Chief Minister U Phyo Min Thein, the project will be welcomed by SMEs.

Continue reading…

Going organic could help Myanmar raise value of crops

There is real potential to develop an organic farming market in Myanmar. This could boost the value of crops that are produced for export, and in turn boost the standard of living for farmers in the country.

As it stands, Myanmar’s farmers already use fewer chemical pesticides and fertilisers than many of the country’s neighbours. However, the sector is reluctant to definitively move into the organic market due to high costs of transport and infrastructure.

Continue reading…

More than 1000 small businesses in Myanmar will receive loans

The government of Myanmar has recommended that more than one thousand small and medium sized businesses (SMEs) should come under consideration to receive bank loans. This information has been released by the Central Department of Small and Medium Enterprises Development (CDSMED) and is good news for the start-ups in the country.

The Ministry of Industry has 46,794 businesses officially signed up and registered with them, and have recommended that financial institutions offer loans to the selected enterprises after they conduct an assessment.

Continue reading…

Regional growth just as important as major cities

Regional growth just as important as major cities

A new report by International Growth Centre (IGC), a research centre based in the UK, has stated that Myanmar’s economic development depends just as much on regional capitals as it does on the major cities of Yangon and Mandalay.

The report highlighted how important it is to develop secondary cities as part of the established plan for boosting the main cities in the country. The research centre is based at the LSE (London School of Economics and Political Science) and is partnered with Oxford University. It has offices in London and Yangon and has released the report called Urban Myanmar.

Strategic growth centres

The three main growth centres as part of the government’s economic strategy for Myanmar are Yangon, Mandalay and Nay Pyi Taw.

Yangon takes its place as a crucial growth centre as it leads the country’s financial and commercial services, as well as exports due to its ports. Mandalay is up there as it is a major trading hub for northern Myanmar and should play a big part in many initiatives. Nay Pyi Taw retains its importance due to being the centre for the government.

However, the main thrust of the report warns against relying too much on the development of Yangon’s economy. It argues that inclusive development is vital, including the growth of regional capitals and secondary cities.

Cities like Yangon attract a lot of investment from overseas and develop quickly. They are busy importing new technologies for manufacturing, for example, giving firms based there an advantage. This can be seen with the garment factories that are situated on the border of Yangon, as well as the industries thriving in the Thilawa Special Economic Zone.

Moving industry out beyond key cities

The report said that secondary cities need to be connected with their regional towns and the main tier cities. This, along with border town and agro-industrial centres being linked will help to allow production to spread away from the main cities.

Secondary cities should be seen as regional hubs that are strategically very important for commercial gain. Similarly, the development of towns on the borders of cities can help to boost trade and support a national identity for the country.

Urban planning vital
Along with these suggestions, the report also says that urban planning is the key to make sure that cities become hubs of economic activity rather than centres of congestion and problems.

The three channels that make productive urban areas:

  • Deep local product and labour markets that allow workers and companies to find jobs or fill positions quickly.
  • Higher wages that attract workers to the cities.
  • Availability of intermediary services.

These have all contributed to the success of Yangon’s growing economy and workforce and need to be implemented in other cities, as well as regional towns for the growth of the country’s overall economy.

Htet Tayza

Transparency is key to attract investment

Experts from the International Finance Corporation (IFC) and the Securities and Exchange Commission of Myanmar (SECM) held a business forum at the Stock Exchange in Yangon recently. Its aim was to discuss the best ways to attract investment and increase stakeholder confidence.

Listed firms were invited to hear key speakers discuss disclosure and transparency standards in reporting. The conference was called Enhancing corporate transparency trends and a business case on transparent reporting and ongoing disclosure and was held with input from the UK Department for International Development and the Australian Department of Foreign Affairs and Trade.

Continue reading…

The Many Advantages of Mobile Banking

Technology and banking are now inextricably linked. Over the last decade, the two have combined to form a new and ever evolving way of doing business in the finance industry, whether personal, business, investing or any kind of fund management.

The term FinTech (financial technology) has emerged as an umbrella word for all sorts of technological advances in banking. It can refer to smartphone Apps that give instant access to bank accounts to websites offering financial advice without high costs or long waits.

Continue reading…

Myanmar’s Foreign Trade Rises in Latest Fiscal Year

Image of stocks online. Htet Tayza discusses Fintech in Asia.

Myanmar’s government is currently focusing on facilitating greater foreign involvement with the nation’s economy, to supply small businesses with the funds required to foster growth. Figures show that these efforts are paying dividends, as Myanmar’s foreign trade rose during the latest fiscal year.

Continue reading…

Singapore Launches Drive Towards Cashless Society

Htet Tayza discusses economics in Singapore. Image by Nicolas Lennuzel

Htet Tayza comments on a recent announcement made by Ravi Menon, the Managing Director of the Monetary Authority of Singapore (MAS) the city state’s central bank. Menon revealed that Singapore is planning to create a cashless economy, by incentivising banks to take digital payments.

Regional fintech hub 

Singapore is becoming an increasingly prominent regional financial hub. The city state was named the largest financial centre in Asia in think tank Z/Yen Group’s most recent Global Financial Centres Index. Singapore is a triple A-rated economy, provides investors to Asia’s four-billion strong population and is home to over 200 banks, a rising number of which are basing their regional headquarters there.

Furthermore, Singapore is currently developing a thriving fintech scene. Its recently announced fintech policy creates an environment where innovative start-ups can thrive. Singapore’s central bank has said that it will invest US$167 million in fintech projects over the next five years. Also, IBM is planning to create its first fintech research and development centre in Singapore, creating a range of technology pilots which could enhance the city-state’s trade and finance industries going forward.

Going cashless 

Basically, Singapore holds the financial and technological infrastructure to go cashless. Expanding on this point at a recently-held fintech conference, Menon noted that “for consumers, the use of cash for daily payments is high,” while “for businesses, the use of cheques is relatively high too.”

Menon supplemented his case by comparing Singapore to Sweden, which is currently leading the race to become Europe’s first cashless society. Cash circulation rates in Singapore, currently equal 8.8% of gross domestic product (GDP), in contrast with just over 2% for Sweden. In 2014, there were practically no cheques written in Sweden, but there was average of 12.7 cheques written per person in Singapore, so the city-state has some way to go before becoming cashless.

Finding solutions 

Menon noted that its costs Singapore around US$1.5bn per year to store and process cash and cheques, an amount he labelled “non-trivial.” He suggested that Singapore’s bank pass on the expenses involved in providing paper-intensive services to consumers completely going forward, to incentivise them to switch to digital payments. Over the next year, Menon added, the MAS wishes to see the number of digital transactions executed via phone, national ID and other secure numbers rise.

News site Bloomberg notes that Citigroup Inc. published a report in June 2016 which sheds more light on this matter. It noted that based on high bank and mobile phone usage, Singapore, the UK, Sweden, the US and Finland are the countries which are most prepared for digital payments. Furthermore, Singapore is already starting to develop its cashless infrastructure. Companies such as Apple and Samsung have now made mobile payment services such as Apple Pay available in the city-state.

Driving society forwards 

An editorial on Finextra argues that “a mobile cashless society will be revolutionary, safer than cash, convenient, quicker to operate and unstoppable.” It will eliminate paper money-related costs for banks and businesses and end cash-related crime, although it could make financial cybercrime a bigger issue. Furthermore, cashless is more convenient for consumers and could even help tackle global warming, as paper money production is a major contributor to greenhouse gas emission.

Within this context, it is easy to see why Singapore’s central bank wishes to create a cashless society. The city-state is already making some progress, but it has a long way to go. As financial authorities in nearby-Myanmar are currently seeing, it can be hard to persuade consumers to change their habits and switch to digital payments. However if Singapore’s banks follow the MAS’ advice, consumers may switch to digital payments to save money, powering the creation of a cashless Singapore.

Htet Tayza.