Low Financial Inclusion, High Cash Usage in Myanmar

Blog Series

The financial inclusion world is watching Myanmar closely. With 54 million people, it is a large market which has been isolated for many years and which could leapfrog financial inclusion. In the past two years, there have been several reports that have shed some light on financial inclusion in Myanmar such as the CGAP/IFC report the UNCDF MAP and a GiZ report on the Financial Sector, but for the first time in 2014, Myanmar was included in the Findex survey and analysis. What can we learn from the new figures from Findex?

There are low levels of financial inclusion in Myanmar

Only 23% of adults declared having an account at a formal institution in 2014. In comparison, China and Thailand – which are quite advanced – reported 79% and 77% of adults, respectively, with a formal account. As a whole, 69% of adults in the East Asia and Pacific Region have formal accounts. These results are in line with what CGAP estimated in 2012 –20% of adults banked – and what Finscope found in 2013 – 17% of adults banked. As expected women and poorer population segments are less included: only 17% of women and  16% of the poorest people have an account.  These are the lowest figures recorded by Findex in the region. We know from other sources that the main providers of formal financial services are two state banks (the Myanmar Agriculture Development Bank and Myanmar Economic Development Bank) as well as Pact Global Microfinance Fund, a successful licensed MFI with over 900,000 clients.

Financial Inclusion: Total percentage of adults with a formal account. Source: Global Findex 2014

Usage of formal services also remains low

In addition to overall low levels of financial inclusion, usage of formal financial service accounts is also very low compared with other countries in the region. For example, if we look at high-use accounts (defined by Findex as accounts where people make at least three transactions per month), there are only 11% of “high users” in Myanmar compared to over 50% in China or in Thailand. Only 12% of adults in Myanmar saved formally in 2014, and only five percent of adults declared that they saved for their old age. Again, these are the lowest figures in the region recorded by Findex. Finally, only two percent of adults made a payment with their account last year in Myanmar compared with 14% in the Philippines or 16% in Indonesia.

Quality of Usage of accounts by percentage of adults. Source: Global Findex 2014

Cash is the emperor in Myanmar

It is king in most developing countries in the region, but Myanmar is exceptional. For example, of the 24% of adults who had a wage in 2014, zero percent of them received it digitally. The best performer on this front in the region is Malaysia, where 23% of adults with a wage receive it digitally. Only one percent of Burmese received government payments and these were made in cash. All the school fees and the utility fees paid in 2014 are also reported to be in cash.

Wage payments received by total percentage of adults. Source: Global Findex 2014

In spite of this challenging data, there is still high hopes for significant progress in the next iteration of Findex. The microfinance sector is expanding, with a few solid MFIs in place and high caliber international providers such as BRAC and ACLEDA. Ten finance companies have been set up in just over a year, and the liberalization of the banking sector could also contribute to improved inclusion, though it will take some time to build staff capacity. The biggest opportunity for financial inclusion to expand rapidly lies in the growth of mobile money. This will require that the Central Bank authorizes mobile network operators to offer mobile wallets to enable the unbanked to make payments and store value. GSMA reports that mobile subscriber’s penetration will grow from 11% in 2013 to 80% by 2016, which will create tremendous opportunities for mobile banking to break through, especially since a large majority of these new phones are “smart”. If MNOs are allowed to provide a mobile wallet soon, the number of people with a formal account could reach 50% by 2019. 



The report finds that Myanmar’s banking sector so far has found it commercially challenging to extend financial access to the poor. As a result, fewer than 20 people out of 100 have access to formal financial services, with most people relying on family savings or costly alternatives such as informal money lenders.


26 April 2015 Submitted by Brad Jones (not verified)

Cash is indeed the emperor in Myanmar Eric! In a country where the largest denomination is the equivalent of US$10, digitization will solve many problems. We are very hopeful that an appropriate regulatory regime is put in place soon to allow access to financial services to those in need.

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