Recent years have seen a drastic shift in Myanmar’s economy and politics. The country has immense potential for economic expansion with a young population, sizable market, ample natural resources, and investable opportunities. Myanmar stands to make great stridles in poverty reduction and economic growth.
MBI’s focus in Myanmar is to work closely with the government to enact policy changes in order to bring about inclusive private sector reform.
KEY COUNTRY ACTIVITIES
MYTHS AND MATHS: THE IMPACT OF FINANCIAL REGULATIONS ON AGRICULTURE IN MYANMAR
The Government of Myanmar has affirmed its commitment to modernizing banking and finance laws and regulations, and at the same time, to developing the country’s agricultural sector. To realize the latter objective, it will be necessary to encourage commercial banks to increase financing for agricultural enterprises. Although the Myanmar Agricultural Development Bank (MADB), credit cooperatives, and microfinance institutions (MFIs) are actively involved in rural and agricultural finance, commercial banks have been reluctant to directly finance agriculture. Current financial regulations are among the key obstacles to expanded lending to the agricultural sector by Myanmar’s banks.
MYANMAR PRIVATE SECTOR DEVELOPMENT (PSD) COMMITTEE
MBI supported the drafting of Myanmar’s national PSD Framework and Action Plan, and refinement of the document’s five policy pillars through critical analysis, roundtable discussions, and workshops with key stakeholders, which included the Union of Myanmar Federation of Chambers of Commerce and Industry (UMFCCI) and other business groups. Following its approval of the framework and plan in August 2016, the government set up a high-level, inter-ministerial committee, led by the vice president, which is collaborating with the private sector on implementing the plan. The Ministry of Commerce and the Ministry of Planning and Finance provide the secretariat for this committee and its five working groups which match the framework’s five pillars.
AGRICULTURAL VALUE CHAIN FINANCE IN MYANMAR
In 2016, with MBI support, two pilot agricultural lending products were designed in collaboration with Yoma Bank staff in Myanmar to improve the efficiency and profitability of crop value chains. One product will finance “apex” farmers who on-lend to numerous nearby small holders so that they can buy inputs such as seed. The other product provides revolving working capital for crop dealers, who often own large warehouses. This financing will enable dealers to buy and store harvested crops in order to take advantage of more favourable price conditions.
MEKONG BUSINESS INITIATIVE
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