Since 2012, Myanmar has seen a steady economic growth, but most people in the Southeast Asian country still don't possess a bank account and prefer to use cash for financial dealings. Ate Hoekstra reports from Yangon.
"If a customer wants to buy a new vehicle, he usually brings a stack of cash with him," says Myo Min Min Htut, a car dealer in Yangon, the commercial capital of Myanmar.
"Customers often come to my showroom with bags full of money. We use machines to count the money," he added.
Cash has always been supreme in Myanmar. House rents, electricity bills and groceries are mostly paid for in cash. As 10,000 kyat (around €6, $7.40) is Myanmar's biggest note, people often have to carry large packs of money with them. But as the country is slowly embracing new technologies, modern payment methods are also offering new possibilities.
"We now see that more and more customers use bank cards or transfer money through a bank. So the payment modes are certainly changing in Yangon," Min Htut told DW.
Yet, most people in Myanmar do not have a bank account. In 2013, only 17 percent of the population had one, and even today only four percent of people with savings keep money in a bank. In the Southeast Asian country, people lack trust in banks, according to research by the Milken Institute, a US-based think tank. People still remember that the military government had nationalized all private banks in 1962, and after private banks were allowed back into the country in the early 1990s, the banking system was severely hit by financial crises in 1997 and 2003.
Even though Myanmar has seen annual economic growth of 6-8 percent since 2012, the heavy reliance on cash is holding back the country's economic development.
According to the Milken Institute, cash payments slow the pace of financial transactions, increase transaction costs and create opportunities for corruption.
Mobile banking picking up
Companies dealing with financial technology believe mobile banking offers a solution. Inspired by the strong growth of Myanmar's mobile phone market, which grew from a penetration rate of seven percent in 2011 to 90 percent in 2016, it is now possible to deposit and withdraw money through smartphone apps.
Shiju Lonappan, chief operating officer of the OK Dollar firm, says their services are used to pay electricity bills, for food delivery and buy phone credit, among many other things. "Myanmar has always been a cash-driven country and it will take time to convince people to use apps, but we see that people are getting accustomed to our services," he told DW.
"Our service is easy and cheap, and it's even available in rural areas where banks close at 3 pm," he added.
OK Dollar claims to have around 600,000 users with up to 90,000 active users per day. Lonappan expects the market to grow rapidly in the coming years. "We are targeting the whole country. In five years, we expect to have 50 percent of the country's population as our customers."
Last year, Thailand-based TrueMoney also entered Myanmar's mobile-banking market. Telecommunications companies, Telenor and Ooreedoo, also offer their own services.
The foreign companies' interest in Myanmar is understandable. A study conducted by Jay Rosengard, a lecturer at the Harvard Kennedy School, shows that mobile banking is picking up in underdeveloped countries where most people don't have a bank account. Rosengard says that mobile-banking tools offer financial services "to the masses in a cheap, accessible way."
Lonappan sees a bright future for electronic payment methods in Myanmar. "Soon, companies can deposit salaries on OK Dollar accounts," he said. "In the future, you can even buy a car with OK Dollar."