Project Data Sheet

Project Data Sheets (PDS) contain summary information on the project or program: Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.

PDS Creation Date
PDS Updated as of 31 Mar 2014

Project Name Financial Sector Reforms
Country Myanmar
Project/Program Number 47159-001
Status Approved
Geographical Location
In preparing any country program or strategy, financing any project, or by making any designation of, or reference to, a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.
Sector and/or Subsector Classification Multisector
/ Multisector
Thematic Classification Capacity development
Gender Mainstreaming Categories

Financing

Type/Modality of Assistance Approval Number Source of Funding Approved Amount (thousand)
Technical Assistance8532Technical Assistance Special Fund1,000
Counterpart 10
TOTAL US$ 1,010

Summary of Environmental and Social Issues

Environmental Aspects
Involuntary Resettlement
Indigenous Peoples

Stakeholder Communication, Participation and Consultation

During Project Design
The project team consulted a range of development partners and local stakeholders during project design. At the Central Bank level: the International Monetary Fund (IMF); World Bank (WB); Japanese International Cooperation Agency (JICA); and Die Deutsche Gesellschaft f?r Internationale Zusammenarbeit (GIZ) were consulted. At the microfinance level: World Bank; PACT; GRET; World Vision; Save the Children; Myanmar Agriculture Development Bank (MADB); Ministry of Cooperatives; Central Cooperative Society; United Nations Capital Development Fund (UNCDF); the International Finance Corporation (IFC); the Myanmar Microfinance Association; UK Department for International Development (DFID); and the Livelihoods and Food Security Trust Fund (LIFT).
During Project Implementation

Description

In line with the Interim Country Partnership Strategy 2012-2014, and as part of the Policy Matrix of the Support for Myanmar s Reforms for Inclusive Growth Policy Based Loan (PBL) in support of the post program partnership framework (P3F), this TA will support sustainable and inclusive economic development. In particular, this TA will support two key program areas included in the interim CPS including building human and institutional capacity to help lay the foundation for medium-term engagement and effective development processes. In addition, the TA will promote an enabling economic environment which is needed to achieve macroeconomic stability, promote trade and investment, diversify the economy, create jobs, improve financial intermediation, and increase agricultural productivity. Through both targeted and flexible capacity building to the Central Bank and the microfinance sector, the overall impact of the TA is focused on improving financial sector intermediation. The outcome of the TA will be a strengthened institutional and policy framework for financial sector development through support for CBM s transition to institutional and budgetary independence and by strengthening its human resources ability strategy which will in turn help CBM to more effectively implement fiscal and monetary policy and regulate and supervise the financial sector. The TA also aims to establish a strategic framework for responsible finance which will lead to greater better financial inclusion for low-income segments of the population but will benefit all people in Myanmar.

Project Rationale and Linkage to Country/Regional Strategy

The government has set out a challenging economic reform agenda to lift economic growth to sustainable levels and to ensure growth is inclusive across different socio-economic groups and subregions. This agenda was described in Support for Myanmar s Reforms for Inclusive Growth (or PBL), which was approved by ADB s Board of Directors in January 2013. The agenda included: (i) macroeconomic stabilization, (ii) trade, investment and financial integration, (iii) stimulating rural development, and (iv) promoting human capital development. The government s reform agenda started with macroeconomic stablization which were based on a unified exchange rate which the authorities floated in April 2012. To anchor the floating exchange rate, the government has introduced a basic monetary policy framework targeting reserve money which is implemented through deposit auctions. The CBM has also initiated a comprehensive and complex set of reforms for central banking and financial sector development. At the same time, and important to the proposed TA, the new Central Bank of Myanmar Law was enacted on 11 July 2013, giving CBM significant administrative and financial autonomy. The CBM will need to restructure its organization to effectively implement the new central bank law. Given its rapid assumption of significant oversight and control over monetary policy and the broader economy, CBM considers capacity building of CBM staff in central banking functions and finance sector development as its highest and most urgent priority to support its reform agenda, including macroeconomic stabilization over the medium term, and financial sector development over the longer term. Support will be required across all areas of CBM s operations with a particular emphasis on, human resources management, monetary policy, and payment systems. At the microfinance level, the government recently adopted a Microfinance Law in November 2011 which established a new framework for allowing local and foreign investors to operate as privately owned entities in the sector. Because of extremely low capital requirements for both non-deposit and deposit-taking microfinance institutions, there are now 166 licensed MFIs (as of September 2013). The Myanmar Microfinance Supervisory Enterprise (MMSE) has the responsibility for licensing and supervising MFIs despite its low capacity to do so. The sector is further challenged by the limited differentiation between deposit and non-deposit MFIs and an interest rate ceiling . In light of the low capacity level of the microfinance regulator, the ease of obtaining a license to issue credit or take deposits, and the recent consumer protection and credit crisis experience of neighboring countries, there is a critical need for the development of basic standards around consumer protection and a financial literacy strategy both at the microfinance level but also at the commercial banking level.

Development Impact

Improved financial sector intermediation

Project Outcome

Description of Outcome
Strengthened institutional and policy framework for financial sector development
Progress Towards Outcome

Outputs and Implementation Progress

Description of Project Outputs
CBM institutional and staff capacity strengthened Support Framework for Financial Inclusion Enhanced
Status of Implementation Progress (Outputs, Activities, and Issues)
Under Output 1, the human resources development advisor have been engaged while the capacity development advisor and payments & settlements technical advisor's recruitment is in the process of being finalized. Under Output 2, rectuiment for the financial inclusion advisor and financial literacy advisor is also being finalized. Fielding of all consultants is expected late April 2014.
Status of Development Objectives
Material Changes

Business Opportunities

Date of First Listing 2013 Oct 11
Consulting Services
Under output 1, three international consultants (a capacity development advisor, human resources expert, and a payments and settlements expert) will be engaged through individual consultant selection to support the Central Bank of Myanmar (CBM) through a comprehensive Human Resources (HR) assessment, development of a short and long-term HR action plan, coordination of training and capacity building, and provision of strategic advice on payments and settlements. Under output 2, two international consultants (financial inclusion advisor and financial literacy specialist) will be engaged through individual consultant selection to develop a framework for responsible finance, help strengthen the microfinance association, and develop a national strategy for financial literacy.
Procurement
Procurement and Consulting Notices
http://www.adb.org/projects/47159-001/business-opportunities

Timetable

Concept Clearance
Fact-finding
Management Review Meeting
Approval
Last Review Mission

Milestones

Approval No. Approval Signing Effectivity Closing
Original Revised Actual
Technical Assistance 8532 04 Dec 2013 11 Feb 2014 11 Feb 2014 31 Dec 2015

Utilization

Date Approval Number ADB (US$ thousand) Others (US$ thousand) Net Percentage
Cumulative Contract Awards
Cumulative Disbursements

TA Amount (US$ thousand)

Approval Number Approved Amount Revised Amount Total Commitment Uncommitted Balance Total Disbursement Undisbursed Balance
Technical Assistance 8532 1,000 1,000 238 762 10 990

Contacts and Update Details

Responsible ADB Officer Kelly L. Hattel (khattel@adb.org)
Responsible ADB Department Southeast Asia Department
Responsible ADB Divisions Public Management, Financial Sector and Trade Division, SERD
Executing Agencies

Links

Project Website http://www.adb.org/projects/47159-001/main
List of Project Documents http://www.adb.org/projects/47159-001/documents