Thura Soe-Paing is Myanmar’s accidental entrepreneur. Arriving back home in 2010 thanks to his Brazilian diplomat wife’s posting there, the former banker and consultant walked into three years of extraordinary political change – and a surprising new business developing mobile telephone-based banking.
“We didn’t expect any of this,” he recalls, amid the clatter of construction around his office in a new industrial estate on the outskirts of Yangon, the commercial capital. “I had planned to work on my golf game – not to be pulled in by all the various parts of industry that everyone talked to me about.”
Now the returnee has a veteran’s view of the opportunities and difficulties facing start-ups popping up across an economy that is opening up after decades of dictatorship. Since the military government handed power to a quasi-civilian successor in 2011, business people tempted by Myanmar’s estimated 60m consumers have had time for a few reality checks, as well as excitement about the possibilities in the many sectors that still barely exist. Obstacles ranging from international sanctions to soaring property prices make Myanmar a fast-moving test of entrepreneurial pedigree.
“Once you get here it’s very easy to get overwhelmed,” says Nay Aung, a fellow entrepreneur who describes the first months of setting up his online travel agency in Yangon as a “painful, painful” experience. “In a country like Myanmar, there’s a crowd going in 20 different directions.”
A half-century of dictatorship and internal conflicts that have not stopped since independence in 1948 have left Myanmar with much catching up to do economically. Its mobile phone penetration rate of 10 per cent is one of the world’s lowest, while its finance industry has been crippled by years of sanctions. When Thura Soe-Paing was asked at a conference late last year to summarise his business idea in fewer than 10 words, he offered: “Mobile banking in Myanmar: no banking, no mobile.”
But things are changing fast on both fronts, as in other areas of an economy that McKinsey says has the potential to grow from $45bn in 2010 to $200bn by 2030. The mobile phone companies Ooredoo of Qatar and Telenor of Norway are due to roll out networks later this year. Banks are expanding their businesses as sanctions are rolled back, while foreign financial institutions hope to be offered licences soon.
Thura Soe-Paing’s plan is for Myanmar to follow a path already trodden in countries from Tanzania to Bangladesh, where mobile phones are used to transfer money among people generally not in the formal banking system – an estimated 95 per cent of Myanmar. He hopes his company’s myKyat product – named for the Myanmar currency – can be expanded to cover other needs too.
Thura Soe-Paing, who was educated in England and went on to work for Boston Consulting Group and Citibank, already knew the world of finance well. He started a company called All Myanmar Investment Partners and co-founded Frontier Technology Partners, which is developing the mobile banking service and has now raised two rounds of money totalling a few million dollars from investors including local backers and Singapore hedge funds. He hopes to launch myKyat in May and he says he is glad he took the early decision to invest heavily in software and support provided by SAP of Germany. “The last thing we wanted to worry about was technology,” he says.
Thura Soe-Paing says many problems he encountered during the early days of his return to Myanmar have improved. Power cuts that used to last hours are down to minutes. The number of local banks through which international transactions can be processed has increased from two to half a dozen or more.
But forbidding challenges remain, not least avoiding the US sanctions that still apply on more than 100 Myanmar individuals and institutions. Entrepreneurs seeking financing also have to grapple with local interest rates as high as 13 per cent.
Local expertise at middle management level is thin, while rents for business premises – payable as many as three years in advance – are spiralling ever higher as more people come to the country. Thura Soe-Paing says he is lucky to have a decent landlord, but he still had to pay for wiring, phone lines and a data connection that offers barely 5 per cent of the bandwidth he had in his flat in Brasília. “You are having to take a leap of faith in the landlord that he’s not going to kick you out or negotiate [rent] unfairly.”
Many of those points are echoed by other entrepreneurs including Nay Aung, who runs his Oway online travel agency from Yangon’s smart Junction Square shopping mall district. His offices buzz as staff wrestle with what can seem like a bygone age of air ticket and hotel room purchases. Nay Aung’s aim is to use algorithms and local nous to improve a booking process that in other Myanmar travel agencies typically requires consultations of printed flight schedules followed by a series of phone calls to confirm ticket availability.
Nay Aung, scion of a successful Myanmar business family, was out of the country for 16 years, during which he studied at US and UK universities, interned at Congress in Washington and worked in Silicon Valley, including a spell at Google. One of his big influences was a period at BlueLithium, an online advertising company that was sold to Yahoo for about $300m in 2007. It woke him up to the need to be in at the start of the communications revolution he foresaw in Myanmar. “I wanted to come here early and establish a presence so I’d be able to grow along with the industry when that happened,” he says.
Inspired also by companies such as Ctrip.com, the Chinese online travel agency, Nay Aung has raised money from investors he says include a Japanese fund and a rich Singaporean individual. The company has had to scale back a commitment to execute all booking requests within six hours – “I think the customers understand there will be certain gaps” – but Nay Aung is encouraged by revenues he says now run into millions of dollars. “The most important thing for us is not profitability,” he says. “It’s growth and market share.”
Entrepreneurs will have a significant part to play if Myanmar is to meet the economic hopes of its people. Thura Soe-Paing says political uncertainty will continue to cast a “long shadow” over business beyond elections that are due to be held at the end of next year. “We believe that in the long term things will happen for the good,”?the?entrepreneur reflects. “And we also believe there will be bumps in the road.”
Thura Soe-Paing曾在英国上大学，毕业后供职于波士顿咨询集团(BCG)和花旗银行(Citibank)，因此他对金融领域有着很好的了解。他创办了一家名为All Myanmar Investment Partners的公司，并与他人共同创建了Frontier Technology Partners，后者正在开发移动银行服务，如今已完成两轮融资，总计筹得数百万美元资金，投资者包括本国的支持者以及新加坡的对冲基金。Thura Soe-Paing希望在今年5月推出myKyat。他很早就决定大举投资于德国SAP公司提供的软件和支持，并对此感到高兴。他表示：“我们最不担心的就是技术。”
上述很多观点得到了包括Nay Aung在内的其他企业家的响应。Nay Aung在仰光的Junction Square智能购物中心区管理着他的在线旅行社Oway。在他的办公室里，电话声此起彼伏，员工们正在忙着预定机票和酒店，那种场景让人感觉似乎回到了过去的年代。Nay Aung的目标是利用算法和对当地的了解来改善预定流程——在缅甸其他旅行社，通常需要先查阅打印出来的航班时刻表，然后再打几通电话确认有票无票。
受中国在线旅行社携程网(Ctrip.com)等公司的启发，Nay Aung从投资者那里筹得了资金——据他说，这些投资者包括一家日本基金和一位新加坡富豪。该公司不得不缩减6小时内处理所有预定要求的承诺，“我认为，客户明白当然会有一些延误”，但收入让Nay Aung备受鼓舞——现在该公司的收入已达数百万美元。“对我们而言，最重要的不是盈利能力，”他表示，“而是增长和市场份额。”