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| Staff of Shinhan Bank's branch in Yangon, Myanmar, address customers in this photo provided by Shinhan Bank. / Courtesy of Shinhan Bank |
By Kim Bo-eun
Banks are expanding their presence in Myanmar, as they seek new opportunities in the fast growing Southeast Asian country.
Myanmar is drawing the attention of financial firms, as a rising economy which has recorded an average of 7 percent GDP growth since 2012, and has a young working population.
Nonghyup Bank is preparing to expand its existing presence, to offer specialized services in agricultural finance.
The lender said last week it acquired approval from local authorities to set up an office in Yangon.
The bank has been offering micro financing services via its subsidiary Nonghyup Finance Myanmar since 2016.
"Setting up an office paves the way for us to set up a branch as well as a subsidiary," a Nonghyup Bank official said.
While he said plans have not yet been specified as the lender is currently in the stage of setting up an office, Nonghyup is seen to be planning to begin a banking business there, based on its area of expertise.
Nonghyup Bank, as a commercial bank offers both retail and wholesale banking services, but it is primarily an agricultural bank which provides financing for farmers.
"Myanmar is an agriculture-based economy and with our expertise in agricultural finance, we will be able to offer relevant services," the official said.
KB Kookmin Bank, along with Industrial Bank of Korea (IBK) and Korea Development Bank (KDB), received regulatory approval to set up a subsidiary in Myanmar in April.
KB Kookmin plans on expanding a mobile banking base there, as well as provide housing finance.
KB Kookmin is planning to launch its mobile-based financial services platform "Liiv" in Myanmar. The plan comes after the lender introduced the platform in Cambodia. The platform had 100,000 users as of the end of last year.
"The plan is to connect the services of offline bank branches with mobile-based services available on mobile phones," a KB Kookmin Bank official said.
"We are seeking to become a global digital banking platform there, because the region lacks competitive digital banking services."
As for housing finance, this is an area of expertise for KB Kookmin Bank as the current lender is a merger of Kookmin Bank and Housing & Commercial Bank.
"We plan to provide education and consulting on setting up related systems, based on an agreement with the government in Myanmar," the official said.
Meanwhile, the state-run IBK and KDB are set to provide financing for Korean firms doing business in Myanmar. There are about 300 Korean companies there.
IBK is preparing to change its existing office into a subsidiary in January next year.
Shinhan Bank became the first Korean bank to enter Myanmar in 2016, setting up a branch in Yangon.
