The document summarizes a project by GIZ, the German development agency, to support development of Myanmar's financial sector. The project aims to strengthen the banking sector's ability to provide sustainable financing to small and medium enterprises. Key activities include improving the legal framework for banking, financial reporting standards, banking sector capacity, and SME finance through pilot programs with three banks. The project partners with the Central Bank of Myanmar and other groups to meet its objectives over the 2014-2016 period.

1. Contact Person:
.
Photos: © GIZ / Veronica Wijaya
Thomas Förch,
Head of Project
E: thomas.foerch@giz.de
T: +95 12306085
No. 635-E Yoma Yeikthar
Street, Kamayut Township
Yangon, Myanmar
Financial Sector Development in Myanmar
Background: GIZ
Deutsche Gesellschaft für Internationale Zusam-
menarbeit (GIZ) GmbH is a federal enterprise and sup-
ports the German Government in international coopera-
tion for sustainable development. GIZ operates in more
than 130 countries and employs approximately 17.000
staff members worldwide.
GIZ has been present in Myanmar since 2012 and is
expanding its activities in the country aiming at sustain-
able economic development. GIZ projects in Myanmar
are implemented on behalf of the German Federal Min-
istry of Economic Cooperation and Development (BMZ).
The three bilateral projects are:
1) Private Sector Development (PSD),
2) Technical and Vocational Education and Training
(TVET), and
3) Financial Sector Development (FSD).
Background:
Financial Sector in Myanmar
An efficient and stable financial sector is prerequisite for
sustainable economic development. The financial sec-
tor in Myanmar is underdeveloped by international
standards. The financial intermediary ratio (credits to
GDP) is with around 10% the lowest one in Asia and
also at the bottom end on an international level. The
current restrictive legal framework together with the
lack of skilled personnel limits the banking sector in
performing its principal role of financial intermediation.
The limited access to sustainable and demand-oriented
financial services is a major bottleneck in the develop-
ment of the economy. This holds true in particular for
small and medium sized enterprises (SME) as they lack
alternative refinancing options.
Objective of the Project
The financial sector development project aims at sup-
porting the Myanmar banking sector to offer sustaina-
ble and demand-oriented credits to SMEs.
Key Activities of the Project
The bilateral project is focusing on four, mutually rein-
forcing areas:
 Legal framework for the banking sector
 Financial reporting practices
 Capacity development in the banking sector
 SME Finance
Project name Banking and Financial Sector Development
Commisioned by Bundesministerium für wirtschaftliche Zusam-
menarbeit und Entwicklung (BMZ)
Political Partner Ministry of National Planning and Economic
Development
Other Partners Central Bank of Myanmar, Parliament of the
Republic of the Union of Myanmar, Myanmar
Banks Association, Yangon University of Econom-
ics, Myanmar Accountancy Council, Office of
Auditor General, Myanmar Institute of Certified
Public Accountants, and individual banks.
Duration Oct. 2012 – Dec. 2016

2. Published by Deutsche Gesellschaft für
Internationale Zusammenarbeit (GIZ) GmbH
Registered offices Bonn and Eschborn, Germany
Financial Sector Development in Myanmar
No. 635-E, Yoma Yeikthar Street, Kamayut Township,
Yangon, Myanmar
T +95 1 230 6084
F + 95 1 501 257
fsd-myanmar@giz.de
www.giz.de
Author(s) Thomas Förch
Layout Wyne Wyne Pye, Sebastian Gilcher
As at January 2015
GIZ is responsible for the content of this publication.
On behalf of Federal Ministry for Economic
Cooperation and Development (BMZ)
Division 220
Addresses of BMZ Bonn BMZ Berlin
the BMZ offices Dahlmannstraße 4 Stresemannstraße 94
53113 Bonn, Germany 10963 Berlin, Germany
T +49 (0)228 99 535-0 T +49 (0)30 18 535-0
F +49 (0)228 99 535-3500 F +49 (0)30 18 535-2501
poststelle@bmz.bund.de
www.bmz.de
Legal framework for the banking sector: GIZ aims at
strengthening the Central Bank of Myanmar (CBM) and
the Myanmar Parliament in creating and enforcing
stable and enabling framework conditions for banks.
Activities to improve the framework conditions for the
banking industry include:
 Supporting the development of human capaci-
ties in a systematic way, especially of the regu-
lation and supervision departments.
 Providing specific and demand oriented tech-
nical advice to CBM.
 Strengthening the Parliamentary Committee
on Banking and Monetary Affairs in its role in
overseeing and developing the banking sector.
Financial reporting practices: GIZ supports the Office
of the Auditor General, the Myanmar Accountancy
Council, the Myanmar Institute of Certified Public Ac-
countants as well as the Central Bank in strengthening
accounting and auditing practices in the banking sector.
Activities in this area include:
 Supporting partner institutions to develop a
country strategy and action plan in order to
implement and enforce international financial
reporting and auditing standards in the bank-
ing sector.
 Supporting the human capacity development
of relevant stakeholders.
Capacity development in the banking sector: GIZ
provides support to centralised training providers in
order to develop the human resources in the banking
industry, with a special focus on SME-Finance.
Activities include:
 Support Myanmar Banks Association, Yangon
University of Economics and individual banks
in the development of adequate and demand-
oriented qualification and training measures
for the banking industry.
 Facilitating exchange and cooperation among
banks, especially via a regular working group.
SME-Finance: GIZ directly cooperates with the banking
industry in building up adequate strategies, organisa-
tions, processes and products for SME-Finance.
Activities to support SME-Finance include:
 Supporting three pilot banks (Kanbawza Bank,
Small and Medium Industrial Development
Bank, Yoma Bank Ltd) via international and na-
tional long-term consultants in developing tai-
lor-made financial services for SMEs.
 Sharing lessons learnt from the cooperation
with the pilot banks with the overall banking
sector.
The cooperation with the other two GIZ projects and
the planned financial assistance project on SME Finance
(to be carried out by KfW) is integral part of the project
layout. The project also actively cooperates with other
development partners and private sector actors in order
to leverage resources and create synergies.
Further areas of cooperation between Germany and
Myanmar in the area of Financial Sector Development
may be identified.
Results & highlights of our work:
 The SME credit portfolio of the three supported partner banks increased by more than 40 percent during
2013/2014.
 The English-Myanmar “Dictionary of Banking and Finance”, which has been published on the initiative of GIZ
and Yangon University of Economics, widely facilitates learning and everyday work in many relevant institu-
tions.
 The GIZ-instrument “Facility for Innovative Learning” has supported several project ideas from the banking
sector itself. For example a training program on SME-Finance has been developed with one bank. The ac-
quired knowledge is shared with the entire sector. In this case the Myanmar Institute of Banking will offer the
developed training program for all banks.