U Thein Zaw Tun, Managing Director, CB Bank : Interview

Interview : U Thein Zaw Tun

How will the Myanmar Credit Bureau improve credit access for small and medium-sized enterprises (SMEs), and how is its rollout progressing?

U THEIN ZAW TUN: Banks have been eagerly awaiting the establishment of the credit bureau for quite some time. Its beneficiaries are not only the SMEs, but the whole of society, as everyone gains a more agile banking sector and greater financial indebtedness prevention. For instance, we are issuing credit cards and personal loans to our customers on a near-daily basis. Right now, it takes considerable time for us to really understand a customer’s financial status and capabilities, as we must use cross-reference observation. However, if we gain access to the credit bureau and a client’s credit scores, it will not only shorten the processing time to issue a loan or a line of credit, but will also increase their borrowing limit.

With regard to implementation, the government, the Central Bank of Myanmar and all the other banks are really pushing to streamline procedures within the credit bureau. While the need for the bureau has been acknowledged by all members of the financial services market, we must wait to see how our clients’ data will be managed. As required by the regulations we are ready to share information about the loans issued, but we still need to see how that information will be used and who will have access to it.

What should the banking sector do to accelerate the digitalisation of financial services and the transition away from a cash-based society?

THEIN ZAW TUN: The key areas are as follows: digital ID, e-security and e-payments. The digital ID process must be carried out solely by the government, while security may be performed jointly by actors from the public and private sectors.

Commercial banks, meanwhile, are playing a leading role in the development of e-payment platforms. Nevertheless, before we can leverage these opportunities, there are important additional steps for the sector to take, such as the effective implementation of centralised digital settlement systems and QR code standardisation.

Given the current economic landscape, what policies could help to ease the liquidity crunch being seen in some key sectors?

THEIN ZAW TUN: Some sectors, including telecoms, hotels and tourism, have maintained sound liquidity in recent years. Banks, however, have experienced some negative impacts arising from the slowdown in real estate growth and the difficulties most citizens face obtaining credit. Nonetheless, given recent regulatory changes and the creation of new institutions and initiatives, including the credit bureau and credit guarantee insurance, we expect the situation to improve very soon. We also expect banking operations to enjoy a further boost from an expansion of the loan and mortgage markets.

As the unbanked population slowly but steadily decreases, what can be done to bring the rest of the country into the formal financial system?

THEIN ZAW TUN: The success of the Financial Inclusion Roadmap 2014-20 generally and bank enrolment specifically have relied on important improvements in financial education that have been made in the last four or five years. Previously, people did not understand why they needed banking, but outreach has taught them that a financial account has more benefits to offer than a wallet.

We believe that we can reach that 50% penetration mark following the launch of a platform that supports tax and public utility payments. The success so far has inspired confidence, and integrated with the growth of bank interoperability, proper standardisation and e-payment development, this confidence will make the roadmap a full success.