SH Suhyup Bank has set up a micro finance institution (MFI) in Myanmar, which is its first overseas subsidiary. The bank is planning to accelerate its entry into Southeast Asian markets, such as Cambodia and Indonesia, in the future.
Suhyup Bank held an opening ceremony for “Suhyup Micro Finance Myanmar” in Naypyidaw, the capital of Myanmar, on Sept. 16, the bank said on Sept. 17. This is the first fruit of Suhyup Bank CEO Lee Dong-bin’s efforts to find a new growth engine.
Lee urged officials of the new subsidiary to provide services with sincerity and put trust from local customers first. He also told them to respect Myanmar's laws and culture in doing business and prevent all kinds of financial accidents.
Since assuming office, Lee has sought to move into Southeast Asian countries, making preparations to open the bank’s first overseas subsidiary. He thought that it would be difficult to create a new breakthrough in the South Korean market.
For starters, Suhyup Bank decided to establish its own subsidiary rather than acquire a local financial company. The bank chose Myanmar as the first country to start its overseas business because it was possible to start business with a small amount of investment and it was relatively easy to gain approval for new business from the local government. Suhyup Bank received final approval on July 31 from the Myanmar government to establish the subsidiary. It was allowed to operate in all eight townships in Naypyidaw. It will operate three offices in Naypyidaw, including the head office in Pyinmana.
Suhyup Bank will focus on micro finance for retail customers in the short term. Although Myanmar has a population of 5.2 million, only 22 percent of the adult population aged 15 years and above have bank accounts and most people who need money use the private loan market with a monthly interest rate of 10 to 15 percent.
The bank also has plans to join hands with the National Federation of Fisheries Cooperatives to expand its business to marine finance in the region in the long term.
This is because Suhyup Bank needs to differentiate itself from other banks as a considerable number of foreign financial companies, including South Korea, have already entered Myanmar. South Korean financial companies operate a total of 22 offices in Myanmar as of the first half of this year, including 12 from banks, one from non-life insurance firms and 9 from specialized credit financial businesses, according to the Financial Supervisory Service (FSS).
A bank official said, "Myanmar's coastline is around 2,000 kilometers. After our local subsidiary gets settled, we plan to join hands with the National Federation of Fisheries Cooperatives to expand our business to coastal regions to transfer marine technology and provide ship loans. We are also studying plans to expand our business to major countries in Southeast Asia, such as Cambodia and Indonesia.”