"While progress has been made, the banking system needs continued modernizing and liberalization," Says Colliers International Myanmar.

According to Reuters Myanmar’s central bank on Thursday announced new rules allowing foreign banks to lend to local businesses, bringing further reforms to the country’s stunted banking sector.

Colliers reports that higher standards reflecting the adoption of a new regulatory framework that is in line with international standards would help to improve the soundness of the banking system.

The Irrawaddy reports that Deputy Governor U Bo Bo Nge said foreign banks can now provide full trade financing services and that the central bank will no longer fix interest rates for foreign currencies but let them float with the market. Interest rates for kyat loans by domestic banks will not be allowed to exceed 13 percent, however.

Going forward, Colliers believes that the demand for credit will remain strong, and banks could deliver more diversified products to serve their customers.

According to the Central Bank of Myanmar, due to a restriction on loan terms, credit to the private sector has mainly gone to agriculture, trade and service activities, which accounted for 59.0 percent of total outstanding loans, while loans to manufacturing stood at just 10.0 percent of the total loans as of October 2017.

The introduction of term loans helps the banking sector to play a more important role in channeling savings to longer-term loan demand from the manufacturing sector. On the retail banking side, diversification is still at a very early stage, and a few banks have just started to provide mortgage loans to finance affordable housing projects, which could potentially be a fast-growing market.

Here is a list of Foreign Banks Branches on the Central Bank of Myanmar website 

Source: Reuters, Central Bank of Myanmar, The Irrawaddy, Colliers International Myanmar 

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