Myanmar’s unbanked population are a “major priority” for KBZ Bank
Brick and mortar branches are still vital to build trust in the country's banking sector, says Nyo Myint
The final trade restrictions on Myanmar were lifted by the outgoing US President’s government in October 2016, marking the final step in the years-long rehabilitation for the previously isolated country. Nyo Myint, Senior Managing Director of KBZ Group, explains what this signals for the country’s ecomomy and industry, and outlines some challenges the country still faces. Building trust in Myanmar’s banks, he explains, means expanding their physical branch networks, as well as investing in mobile banking and fintech. Plus there is still work to do in disaster recovery and other corporate social responsibility initiatives – and an ongoing human capital challenge.
World Finance: The final trade restrictions on Myanmar were lifted by the outgoing US President’s government in October 2016, marking the final step in the years-long rehabilitation for the previously isolated country. Nyo Myint, Senior Managing Director of KBZ Group, joins me now.
What does this last change signal for Myanmar’s economy and industry?
Nyo Myint: It’s definitely great news for our economy. Since the country started opening in 2010, we have seen increased foreign investment flows from Asia as well the EU, whereas US companies and banks have remained cautious. But the ending of the remaining sanctions has cleared the way for them to invest and trade more with Myanmar and for Myanmar companies to do business with US companies.
World Finance: KBZ Bank controls more than 40 percent of the retail and commercial banking space in Myanmar, so which industries are growing and attracting foreign investment?
Nyo Myint: Myanmar is still an untapped economy, so there are abundant opportunities for investors in multiple sectors.
Myanmar has a population of about 51 million, with the majority aged under 30. And labour costs are still competitive. Many manufacturing companies have shifted their operations from China and Vietnam into Myanmar.
The food and beverage industry has also taken off in the last few years. And Myanmar’s tourism sector is also very attractive. The number of inbound tourists grew 20 percent in the past years. There are a lot of opportunities for the opening of hotels and many other services related to the tourism sector.
World Finance: Now on the retail side, how much work needs to be done do to reach the currently unbanked population?
Nyo Myint: KBZ Bank holds very much holds reaching our unbanked population a major priority. We have already opened more than 400 new brick and mortar branches in the last four years, and have been able to reach towns and cities where no previous banking services were available.
Physical brick and mortar branch expansion is very much needed to develop trust in the banking sector.
KBZ is also focusing on the expanded payment systems such as various cards through ATM and point of sale. We are also now in the process of partnering with a big telco company to launch a mobile money platform, to reach more customers and to provide services to unbanked populations.
World Finance: You’re also reaching out to aid the Myanma with your Brighter Future Foundation – what kinds of work are you doing?
Nyo Myint: The foundation focuses on five areas of social commitment: Disaster Relief and Recovery Assistance, Women, Environment, Education, and Community and Culture.
The notable projects are one water project, where a large number of tube wells have been drilled to supply water in the drought area; and disaster relief and recovery efforts throughout the country.
The total contributions for all of our initiatives has reached more than $110m.
World Finance: You’ve previously talked about the human resources challenge that Myanmar’s banks are facing – how is that developing?
Nyo Myint: There are still challenges in human resources. We address this by strengthening our own internal staff development programmes: we have two dedicated training facilities to provide in-depth training to our new recruits, and develop existing staff.
We have also partnered with multiple universities in Yangon for an internship programme that provides final year students practical experience in banking before they complete their studies.
We are always on the lookout for top international talents and Myanmar citizens living abroad to come back and join KBZ to make a contribution back to their motherland.
World Finance: Projected growth for Myanmar is eight to 10 percent for the next five years – so what are your personal hopes for the country?
Nyo Myint: I believe we can make a leapfrog success in national development.
The NLD party led by Daw Aung San Suu Kyi had achieved a landslide victory in the previous general election. That means the government has the full trust from the majority of the people. And the peace agreement is now well undergoing.
As for me, I believe we can regain our preeminence in the region, and be a leading light once again.
World Finance: Nyo Myint, thank you.
Nyo Myint: Thank you.