Banking and financial sector development

Project description

Title: Banking and Financial System Development
Commissioned by: German Federal Ministry for Economic Cooperation and Development (BMZ)
Country: Myanmar
Lead executing agency: Ministry of Planning and Economic Development (MoPF)
Overall term: 2017 to 2019 

Myanmar's cash-driven system_Photo by Veronica Wijaya-GIZ


Since Myanmar began to open up in 2011, the government has introduced a number of different reforms to its economic policy in order to effect market-oriented structural changes. Sworn into office in 2016, the government led by Aung San Suu Kyi as minister for foreign affairs and Htin Kyaw as president continues to pursue this intensive transition. A stable and inclusive financial sector is a precondition for sustainable economic development. Myanmar's financial sector is underdeveloped by comparison with international standards. For instance, in 2014 only a quarter of the country’s inhabitants held a bank account. Compared to other countries of the region, Myanmar has the lowest level of access to formal financial services. Restrictive and fragmentary legislation and a lack of qualified personnel in the financial sector are among the reasons for the low level of credit disbursements. The limited availability of needs-oriented financial services is hampering the country’s economic development, above all with respect to small and medium-sized enterprises (SMEs). These possess neither the knowledge nor the experience to apply for credit from a bank. Nor do they have sufficient access to affordable alternative sources of financing.


Small and medium-sized enterprises have comprehensive access to banking services. They experience the financial sector as transparent and inclusive.


The programme provides support for financial institutions at different levels. For instance, it is advising the central bank on the creation of a supportive regulatory and supervisory legal framework for the financial sector. Other priority areas are:

  • support for banks in issuing their annual reports in line with the International Financial Reporting Standards (IFRS)
  • the promotion of training courses for the banking sector embedded in institutional structures, above all with the Yangon University of Economics
  • cooperation with selected banks for the development of a needs-oriented portfolio of financial products for SMEs.


The programme provided advice on drafting the new Financial Institutions Law, which was passed by parliament in 2016. This law has established the foundations for the gradual liberalisation of the banking sector. The aim is to achieve greater transparency while ensuring that demand-based financial services are available to SMEs.

The partner banks of the programme have been able to increase their combined credit portfolios for small and medium-sized enterprises by a factor of 12, while adhering to the quality criteria for the issuing of loans. In all, more than 15,750 SMEs have gained access to credit. Almost half of these companies are based in rural areas.

The programme has worked closely with partner institutions, such as the Myanmar Banks Association and the Yangon University of Economics. This has produced an extensive array of HR development courses. By the end of 2016, expert and management staff in the banking sector had participated in a combined total of more than 13,750 days of training on financing SMEs with commercial banks.

The Banks Association runs a regular course for a certificate in issuing of credit to SMEs. A number of financial institutions have submitted their own project proposals to receive support from the programme. The costs involved are largely carried by the respective partner institutions themselves. They place their experience and newly acquired know-how at the disposal of the whole financial sector.

In 2015, the Yangon University of Economics revised its Executive Masters degree in Banking and Finance. As part of the cooperation with the programme, it provided teacher training classes for more than 30 lecturers.

With the support of the programme, a committee has been founded, whose members include the Central Bank of Myanmar, the Office of the Auditor General, the financial reporting regulator and the associations of auditors and banks. The aim of this committee is to reach agreements under which international reporting standards are applied in the national context. The programme also supported the committee in developing a strategy and action plan. The plan was ratified as a government document in 2015, and has been followed since then.

A bank counter in Myanmar_Photo by Veronica Wijaya-GIZ

Additional information