2022-07-19-世界银行-缅甸金融部门改革_政策说明（英）_29页_2mb

Myanmar Financial Sector Reforms Summary

Core Content

This policy note provides an overview of Myanmar's financial sector reforms over the past decade, the impact of the COVID-19 pandemic, and the effects of the February 2021 coup on the reform agenda. It highlights the challenges, progress, and future implications for the sector.

Key Messages

• Financial Sector as a Foundation for Democratization: Financial sector reforms were considered a critical underpinning of Myanmar's democratization process, aiming to create a more open, stable, and accessible financial system.
• Legacy Issues and Trust Deficits: Prior to reforms, the financial system was plagued by mistrust due to past crises, opaque interventions, and restrictive policies that limited access to formal financial services.
• Structural Challenges: The sector faced issues such as short-term financing dominance, low financial inclusion, and limited access to long-term financial instruments.
• Reforms and Progress: From 2011, Myanmar made significant strides in reforming its financial sector, including legal and regulatory changes, introduction of microfinance and digital payment systems, and gradual opening of the insurance sector.
• Current Crisis: The impact of the pandemic and the 2021 coup have severely threatened the progress made, leading to a risk of stagnation or reversal of reforms. The financial system is now facing renewed isolation due to international sanctions and Myanmar's FATF grey listing.
• Stability and Confidence are Crucial: The success of financial sector modernization depends on public confidence and institutional stability, which are currently lacking.

Main Reforms and Progress

1. A Decade of Reforms (2011–2021)

• Legal and Regulatory Overhaul: The Central Bank of Myanmar (CBM) Law (2013) and the Financial Institutions Law (2016) marked a shift towards an independent and more effective regulatory framework.
• Financial Inclusion: The introduction of microfinance institutions (MFIs) and digital payment systems improved access to financial services, particularly for underserved populations.
• Banking Sector Modernization:
  • The number of private banks increased from 24 in 2018 to 27 in 2019.
  • State-owned banks (SOBs) held a significant portion of the banking system's assets (around 33.3% in 2018 and 27.6% in 2019).
  • SOBs were primarily focused on agriculture and rural credit, whereas private banks concentrated on urban and commercial sectors.
  • Overdrafts were a major source of lending, comprising over 75% of total bank lending at their peak.
• Financial Depth and Structure:
  • Domestic credit to the private sector was only 25.3% of GDP in 2018, significantly below regional peers.
  • The banking system's financial depth was low, with total deposits, credits, and assets representing less than 50% of GDP.
  • The sector's reliance on short-term instruments and lack of long-term financial instruments limited the development of a proper yield curve.
• Regulatory Reforms:
  • The CBM introduced prudential regulations in 2017, including capital adequacy, asset classification, large exposures, and liquidity ratio requirements.
  • These regulations aimed to convert overdrafts to term loans and improve governance and transparency in the banking system.
  • A three-year transition period was granted to banks to adapt to these new norms, later extended to August 2023.

2. Microfinance Sector

• Growth and Expansion:
  • The microfinance sector saw rapid growth after the 2011 Microfinance Law, with over 190 MFIs and 6 million clients by February 2020.
  • Loan sizes were capped at around US$7,000, and interest rates were limited to 28%, well below informal market rates.
  • MFIs did not require collateral for small loans, contributing to their popularity among underserved populations.
• Demographics:
  • Most clients were women, with a majority of loans being group-based.
  • The sector was stable with low portfolio at risk indicators before the pandemic.
• New Legal Framework:
  • A new Microfinance Business Law was proposed in 2020 to expand product offerings, allow for collateral on larger loans, and improve data sharing with credit bureaus.
  • The law aimed to address liquidity issues and the growing risk of personal indebtedness.

3. Insurance Sector

• Monopoly and Opening:
  • The insurance sector was a state monopoly for over 50 years, but began opening up in 2013 with the granting of 12 licenses to domestic operators.
  • In 2019, the government allowed foreign insurance companies to enter the market, leading to the establishment of five 100% foreign-owned life insurance firms.
• Market Composition:
  • Motor third-party liability (MTPL) insurance dominated the market, primarily concentrated in urban areas like Yangon.
  • Life insurance accounted for 31% of the market, while property insurance represented 55%.
• Challenges:
  • The sector remained constrained by operational restrictions and a lack of data on cross-borrowing among clients.

4. Impact of the Pandemic and the Coup

• Pandemic Effects:
  • Despite limited infections, the repeated lockdowns severely impacted small and micro firms.
  • The proportion of firms reporting financial risk increased significantly over time, with micro firms being the most affected.
• Coup and Political Uncertainty:
  • The coup of February 1, 2021, and the resulting political and economic uncertainty further destabilized the financial system.
  • International sanctions and the FATF grey listing pushed the system back towards isolation.
• Reversal of Progress:
  • The reforms that had improved financial inclusion and transparency are now at risk of being reversed.
  • The lack of stability and public confidence threatens the long-term development of the sector.

Key Information

• Financial Inclusion:
  • Only 0.0% of adults had access to private credit bureaus in 2018.
  • The number of depositors per 1,000 adults was 239.5, significantly below the EAP average of 963.
• Banking System Structure:
  • State-owned banks: 4 institutions, holding 26.4% of total deposits in 2018.
  • Private banks: 24 institutions in 2018, increasing to 27 in 2019.
  • Foreign bank branches: 13 in 2018 and 2019.
• Reforms and Their Implications:
  • The CBM's regulatory reforms aimed to align the banking system with global standards.
  • These reforms were met with challenges, including a significant reliance on overdrafts and a lack of capital.
  • The transition period for adapting to new regulations was extended to August 2023.
• Future Outlook:
  • The financial sector's modernization is contingent on stability and public confidence.
  • Current conditions, including political instability and international sanctions, are undermining the reform process.
  • There is a need for a return to stability and the restoration of public trust in the financial system to ensure continued progress.

Conclusion

Myanmar's financial sector reforms over the past decade have laid the groundwork for a more inclusive and stable financial system, but the recent events of the pandemic and the coup have threatened this progress. The sector remains vulnerable to external shocks and internal challenges, and without stability and public confidence, the gains made are at risk of being reversed. The path forward requires a restoration of trust, regulatory autonomy, and a conducive environment for financial innovation and development.