Click here to read Part I - Time to Invest
Click here to read Part III - Time to Investigate II
OUR VIEWPOINT ON CLIENTS’ DRAWBACKS HINDERING THEM FROM STEPPING FOOT IN MYANMAR
While there are opportunities in Myanmar for foreign investors, Myanmar is not without its own weaknesses that we have to acknowledge. In a way, it would be good if investors hold realistic expectations about the pace of the economic reforms.
1. Lack of access to information.
Our view: Finding reliable and trustworthy data within Myanmar is undeniably a real challenge for all investors. Many investors are hesitant because of this major point.
A wise choice out is to get inside the country and you will know you are entitled to a different view. Access to information improves, eliminating all hearsays and empowers the decisions you will be making.
Since a credit bureau has not been established in Myanmar for you to rely on, being on the ground is the fastest route for you to conduct background checks and reduce your difficulty in evaluating a potential partner’s credibility.
2. Weak financial and banking systems
Our view: A seemingly weak financial system within Myanmar is a real situation and shows no signs of major headway towards a sound and efficient banking system in the short run.
Though card-based transactions gradually return to the country, most local people and companies still prefers to be paid in cash and not credit cards (mostly still functions as debit cards). Payment modes are still very traditional. Many e-commerce transactions currently still operates on a cash on delivery (COD) basis. Banks are only just beginning to modernize their services with the usage of electronic banking and payment systems. Local businessmen relatively still hold a conservative mind-set which is clearly displayed in examples i.e. property owners still require tenants advance full year payment.
However, with the recent calls from US business community to lift the sanctions and the recent award 13 foreign banking licenses by the Central Bank of Myanmar, we do see a great step forward in liberalizing Myanmar’s financial industry. The presence of foreign banks serve to develop and advance the banking reform and access to capital in Myanmar is expected to improve. With the foreign banks players now in the arena, foreign companies registered in Myanmar may find it easier to get access to loans and finance their projects; since the foreign banks are restricted to providing loans only to foreign (wholly owned and joint ventures) entities in Myanmar.
We are also seeing progression in the banking infrastructure as mobile and internet banking platforms are introduced by both foreign and local banks.
For those who have missed out on the first 2 part of this series, click on the links below:
Click here to read Part I – Time to Invest
Click here to read Part III – Time to Investigate II
***Editor's Note: This post is part two in a 3-part series. Part three (continuation) will be published on 4 May 2016.