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Mobile financial services for Myanmar’s unbanked
Myanmar’s Mingalabar Holding has formed a joint venture with Wing Specialized Bank to provide mobile financial services to the more than 80 percent of people in Myanmar who do not use banks. Kyaw Htoo Linn, founder of Mingalabar, recently spoke to Khmer Times’ May Kunmakara and explained his company’s decision to team up with Wing.
KT: Why did Mingalabar choose to enter into a joint venture with the Cambodia-based Wing Specialized Bank?
Mr. Htoo Linn: Myanmar and Cambodia have similar cultures and both our people are similar. We are a family in Asean and Wing is very experienced in the e-money sector. So when we combine our local knowledge and expertise and Wing’s technical experience, we have a winner. We believe that together with Wing we can provide a good service to the unbanked population of Myanmar.
KT: More than 80 percent of Myanmar’s population is unbanked. Realistically, how will this e-money joint venture work in your country?
Mr. Htoo Linn: Let me emphasize that our main segment is the unbanked. These are people at the bottom of the pyramid – those who are far removed from existing banking services. The largest bank in Myanmar can have a few hundred branches nationwide but our network spans around 30,000 to 40,000 agents throughout Myanmar. We are able to reach the most remote villages through our network of agents, which banks can’t. Villagers don’t have to travel too far to use our services. We are right there in their vicinity and they can make an on-the-spot transaction with one of our agents.
KT: Can you tell us briefly your experience in the e-money and mobile financial service sectors?
Mr. Htoo Linn: One of our subsidiaries – EasyPay – is the main contractor for a large bank in Myanmar, for the delivery of e-money technology and products for mobile financial services. EasyPay has got over five years of experience in these sectors.
KT: If Mingalabar already has the technical experience, why then did it decide to go into a joint venture with Wing in Cambodia?
Mr. Htoo Linn: Well, I have also asked myself that question. Setting up a mobile wallet system or an e-money company is easy. The technology is already available and it is a matter of recruiting the right people. However, we are aiming for definite success.
We need experience in liquidity management and the selection and training of agents across the country. These are the key elements in a mobile financial service, and this is where our partnership with Wing comes in.
Wing has extensive experience in these areas and we hope the joint venture would also allow us to enter into a knowledge-sharing deal with them.
KT: Myanmar already has a few players in the e-money and mobile financial service sectors? Do you expect a high-level of success with Mingalabar?
Mr. Htoo Linn: Of course there are already a few players in the market. But we don’t see them as competitors. There is a very low base of financial inclusion in Myanmar and financial service providers need to expand their reach in the country to include the more than 80 percent of the unbanked population. Technology, and particularly mobile telephony coupled with agent cash-in and cash-out services, will provide a significant accelerator to this development.
The journey, however, is long. But we remain optimistic. Mingalabar has its own niche and we are good at what we are doing. Success is within our reach – more so in this joint venture with Wing.
KT: The service fee of Wing is a bit high compared to other mobile financial service providers. Will you offer the same rate?
Mr. Htoo Linn: The service fee is not important. Western Union charges a high service fee, but customers still use their services. The service fee has to be matched with the delivery of services.
Serving the unbanked population is our prime objective. We will determine what would be the best service fee.
KT: The government of Myanmar has an ambitious target for financial inclusion, with a goal of reaching 40 percent of people with financial services by 2020. How is the licensing regime changing in response to this target?
Mr. Htoo Linn: The Central Bank of Myanmar decides on what structure will comply with its regulations and is supporting all the players. For bank-led mobile payment licenses, the rules were laid out by the central bank nearly two years ago. We are in the process of applying for a license as a non-bank mobile financial service provider.
Source: http://www.khmertimeskh.com/news/37370/mobile-financial-services-for-myanmar—s-unbanked/