P2P money transfers take off in underbanked Myanmar

Market leader Wave Money has amassed around 7 million subscribers.

Fintech companies specialising in money transfer and microfinance are finding their niche in underbanked Myanmar especially as the government pushes for greater adoption of technologies in tackling the last-mile banking problem, according to a report from Fitch Solutions.

Following the liberalisation of the telco sector in 2014, the number of mobile subscribers have grown significantly in the country. Companies can also take advantage of Mobile Financial Services (MFS) Regulations which were introduced in 2016 as a way to allow licensees to offer kyat-dominated cash-in and cash-out services, money transfers and domestic payments.

Wave Money, a joint venture between telco operator Telenor and Yoma Bank, leads the country's mobile payments space after being one of the first companies to receive an MFS licence in 2016. By December 2018, the company had seven million subscribers and had as many as 40,000 agents. In 2018, Wave Money processed $1.3b (MMK2.0t) in transactions.

SMEs seeking cheaper credit are also stoking the rapid growth in the country's microfinance segment. Deposit taking microfinance institutions (MFIs) had as much as $646.2m (MMK981.65b) worth of outstanding loans as of Q3 2018, whilst non-deposit taking MFIs had $80.2m (MMK122.13b) over the same period.

"Myanmar also boasts a burgeoning microfinance segment, which could further accelerate as more start-ups introduce solutions to make the loan approval process more efficient," the firm said in a report. 

On the other hand, POS payments is still lagging as cash still reigns supreme in transactions in the informal economy. Regulators are actively working to promote POS payments with the signing of an agreement by the Myanmar Payment Union with the Network for Electronic Transfers (NETS) of Singapore which will see the latter sharing its technical and operational knowledge pertaining to the Singapore Quick Response (SGQR) Central Repository platform, with the goal of rolling out unified QR codes across different payment operators in Myanmar.