KBZ with the first national credit cards in a decade

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KBZ is set to issue the first real credit cards in more than a decade, as the bank claims the Myanmar Central Bank has given permission to start the service, according to a press release yesterday.

Credit cards can be used nationwide at ATMs and restaurants with point-of-sale terminals. They will be offered with a “Buy Now, Pay Later” theme, the release said.

KBZ Card Department Deputy General Manager Daw Swe Zin Win said the interest rate will be 13% per annum, although if customers repay the principle within a specified time, they will not have to pay interest.

“We plan to offer other types of credit cards to our customers, depending on loan amounts and other factors,” she said.

Applications will take three or five days, with limits depending on the level of trust KBZ has in the client. Most clients with loan and deposit accounts with the bank will be of good quality, as will those with a referral from a responsible person.

There are a number of credit cards in the country, although they work the same as debit cards in that they must be prepaid. Several banks were previously allowed to use credit cards, although the Central Bank of Myanmar stopped this practice during the 2003 banking crisis when some of the country’s largest banks went bankrupt.

Card transactions are slowly coming back to the country. The Central Bank began allowing national banks to reissue debit cards at the end of 2012, resulting in rapid growth of ATMs. Central bank officials have also said they will allow certain banks to offer credit cards, again depending on the strength of individual financial institutions.

Yesterday, a Yangon-based central bank official said protecting domestic banks was a priority in his oversight. Banking policies were too relaxed before the 2003 crisis, and many people made purchases on credit from stores for which they did not have the capacity to pay, he said.

“Now is the right time to issue credit cards in amounts that are not dangerous for national banks,” he said. The official added that initially the credit will be limited to between K300 and K500,000 in order to reduce risk.

Other banks are discussing with the Central Bank an upcoming offer of these services.

Myanmar has also announced its intention to set up a credit bureau, although so far the bureau has not been set up. This would allow different banks to do more in-depth background checks on their borrowers.


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