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Compliance in Myanmar’s Finance Industry: A Year of Regulatory Focus Amidst Pandemic Challenges

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In a year marked by unprecedented global challenges, Myanmar’s microfinance regulators took decisive steps to strengthen compliance and support borrowers affected by the pandemic. The Financial Regulatory Authority (FRD) and its Microfinance Business Supervisory Committee (MBSC) issued several directives and instructions in 2020 aimed at regulating microfinance businesses and mitigating the impact of COVID-19 on borrowers.

Focus Areas

The key areas of focus for the regulators included:

• Lending to civil servants, private company staff, and own staff
• Reporting of funds received from UN-sanctioned entities
• Interest period calculation methods
• Regulation of MFI activities during the pandemic period
• Inspection of company premises jointly by MLIP and MOHS
• Extension of deadline for transformation of INGO/NGO to company
• Loan programs with Myanma Economic Bank
• Provisioning bad debts
• Debt repayment relief for MFI customers in Yangon, Bago, and Rakhine

Regulatory Efforts

These measures demonstrate the regulators’ commitment to ensuring financial stability and protecting consumers during a period of unprecedented uncertainty. The efforts aimed to:

• Strengthen compliance and ensure financial institutions maintain trust and confidence among stakeholders
• Support borrowers affected by the pandemic and mitigate its impact on the industry
• Promote financial inclusion and access to credit for underserved populations

As the industry continues to evolve, it is essential that compliance remains at the forefront of financial institutions’ strategies. By prioritizing regulatory compliance, financial institutions can maintain trust and confidence among stakeholders and support economic growth in Myanmar.