Banks receive boost as Myanmar urges citizens to beef up savings

The number of adults who save via banks is at a measly 11%.

Banks in Myanmar can start looking forward to a larger liquidity pool as the country drafts a National Savings Mobilisation Strategy to encourage its citizens to save more, reports The Myanmar Times. 

Also read: Myanmar to allow 13 foreign banks to offer import financing services

“Despite rising volume of savings at local banks, more is needed to support continued economic growth and for Myanmar to reach parity with its regional neighbours,” deputy minister of planning and finance U Maung Maung Win was quoted in local media reports.

Informal savings, which includes holding on to non-cash assets, jewelry or cash at hand, constitute the main savings channel for most citizens in Myanmar especially for those residing in rural areas, according to the UN Capital Development Fund (UNCDF).

Most citizens cite that the top reason behind their lack of savings is not having enough funds to spare after accounting for living costs, a UNCDF survey show.

Despite a mild growth, the number of adults in Myanmar who save via formal means like those in banks and other financial institutions have grown from 6% in 2013 to a measly 11% in 2018.

Myanmar has the second lowest levels of gross savings per capita in ASEAN although gross savings rate has inched up marginally from 26.2% in 2016 to 26.7% in March 2017.

Photo from Michael Coghlan from Adelaide, Australia - Settling In, CC BY-SA 2.0