Blockchain Market Insights: Myanmar
Though we often speak of the underserved population as one group, the reality is that small businesses each sit in different markets that vastly differ from each other. The potential impact of blockchain is, as a result, just as varied based on the market in question.
Last week the LendLedger team covered Kenya, analyzing the potential impact of blockchain-powered lending across various key sectors. Now we turn our focus to Myanmar where blockchain has the capacity to solve issues of distrust in the labor market, assist migrant workers, and deal with the pervasive power shortages the country faces.
Restoring private sector credence
Document forgery is a big issue in Myanmar. Every profession, including many in the informal sector, requires documents which prove that employees have studied to a specific standard. This has resulted in a thriving market for fake job qualifications, which cost around K20,000 (around a quarter of the average monthly wage). Although public sector employees are sometimes subject to a deeper, more extensive inter-departmental checks, for private sector employers, there is still no easy way to validate such information.
Blockchains immutable ledger would make it possible for documents to be unquestionably verified by the employers who need them. Due to the fact that each transaction on a blockchain is verified by a series of “nodes” it is impossible to alter or forge these records. Aung Bo Bo Lin, director of Blockchain Development & Research Co Ltd has spoken to the Ministry of Education about creating a secure means for the public to verify whether education documents are genuine. The integration of blockchain with Burmese governance is an important step for the technology’s future in the country. Typically countries who’s bureaucracies use blockchain have the most favorable legislation in regards to the technology, greatly aiding blockchain entrepreneurs planning to enter the space.
Supporting families
According to the most recent data from the United Nations Migration Agency, more than 4.25 million Myanmar nationals work abroad in countries such as Thailand, where the economies are significantly more developed. As a result of these migrant workers roughly 5% of Myanmar’s GDP comes from remittances. However, experts estimate that a large percentage of the money sent back to Myanmar is lost as workers use informal, money agent networks when sending money back home. Why? Because banks levy high taxes on remittances. The result is that both worker’s hard earned finances and the country’s GDP more widely, is placed at risk.
Myanmar’s Shwe Urban and Rural Development Bank have caught onto the potentials of a blockchain based solution and signed a deal with Everex crypto company for the development of a blockchain-based remittance service with Thailand. Ensuring transactions occur on chain allows them to both be impossible to tamper with and equally entirely traceable. Whilst certain blockchains incur high transaction costs like Bitcoin’s estimated $60 per transactions, others like Ripple and Stellar have transaction costs under 1/10th of a cent. This would allow migrant workers to reject informal money agent networks and ensure their funds reach their families securely.
Providing Power
In Myanmar around 70% of the population live in rural areas. To lay down one kilometer of power line costs utility companies around half a million dollars, far exceeding the amount they can hope to charge for power. Power suppliers are therefore deeply disincentivized to provide power to small communities within these rural areas, meaning they go largely underserved. Enter blockchain based companies like Bitlumens. Bitlumens provides these rural communities with off-grid energy sources employing renewable energy. Equally, whilst installing energy sources into residences homes the company simultaneously installs meters measuring key information such as power generation and consumption. Using the blockchain, this data is stored and can then be used by individuals to develop a credit history; the type LendLedger leverages in its data driven loans. This data also demonstrates to traditional utilities providers that their is an incentive to invest in these otherwise underserved communities.
Moving forward
Whilst Myanmar may not be moving as quickly towards blockchain adoption as some of the others countries in the region, such as China, Japan and Singapore, it possesses a range of specific advantages in adopting the technology. Most notably is the fact that, as such a new country, Myanmar does not have to overcome legacy institutions, which may be resistant to employing blockchain; The Yangon Stock exchange for example, which was only established in 2015, is exploring the use of blockchain to connect with local brokerages and protect against data loss during the pervasive power outages which plague the capital. Similarly, blockchain based lending could be an asset to Myanmar as estimates show that under 5% of the population have a bank account. Using blockchain and platforms which extract customer data from novel sources to generate loans (as LendLedger does) Burmese Lenders, Developers and Data Providers truly have the opportunity to make a massive impact.
LendLedger is actively seeking partnerships in Myanmar. Take a look at our partnership portal and get in touch at hello@lendledger.io to collaborate.
