Kookmin Bank (KB), Industrial Bank of Korea (IBK) and Korea Development Bank (KDB) are gearing up to submit plans to start business in Myanmar. The banks will include market entry strategy and corporate social responsibility (CSR) plans in the business plans to sustain their momentum in the Southeast Asian region. Industry watchers believe these plans would work as a kind of mid-term inspection before the banks receive the final approval to enter the Myanmar banking market from the Myanmar government.

According to the industry sources on June 11, three Korean banks that have received preliminary approval should submit their interim business plans to the Central Bank of Myanmar (CBM) by next week. Local office chiefs will give presentations based on business plans at A meeting with CBM members at the end of this month. The meeting will include a briefing about preparations for final authorizations and strategies to enter the market.

Due to the Covid-19 outbreak, all three banks are preparing for final authorizations in local offices. The local offices are communicating with regulators and conducting on-site inspections of real estate in Yangon regarding the establishment of bank headquarters and branches. Employees dispatched to the local offices are handling most of the tasks necessary for the final authorizations.

The strength of the three banks chosen by Myanmar is clear. KB has strengths in housing finance, IBK has strengths in small- and medium-sized enterprises (SME) finance and KDB has strengths in development finance. The Myanmar government hopes these banks can play a pivotal role in helping Myanmar’s economic development.

KB has a clear blueprint to spread advanced housing finance techniques and retail banking experiences in its business plan. Myanmar is in an economic development stage and needs better housing, electricity supply rates, and the construction of Social Overhead Capital (SOC) and infrastructure. KB, which established itself as a leader in South Korean housing finance in the 1980s and 1990s, is expected to have a strong competitive edge in the Myanmar market.

IBK and the state-run KDB are expected to submit roadmaps for SME finance and development finance. IBK will spread its systems and culture based on loan quality in the SME finance sector.

KDB, which is preparing to enter the Myanmar market by setting up a branch, will present its long development finance experience and focus on housing loan products. KDB will seek to create synergy with the Myanmar government’s project to create a collective residential complex for low-income families. (Reporting by Hyunwoo Jin)