Monday, 12 May 2014

SMEs face more foreign competition for funding

Local small and medium-sized enterprises (SMEs) are facing tough times with limited access to funding and may be taken advantage of by foreign partners, said an official of the national trade chamber.

Myint Zaw, joint secretary of the Union of Myanmar Federation of Chambers of Commerce and Industry (UMFCCI), suggested local SMEs shun foreign partnership.

“It’s better for local SMEs to stand alone, as those from other countries are making an entry,” he said.

Myint Zaw noted that at Tatmadaw (Army) Convention Hall, there had been frequent SME exhibitions hosted by companies from Thailand and Malaysia as the government opens doors for foreign players.

Myanmar has set the year 2015 for SME development while other ASEAN member countries are joining in light of the ASEAN Economic Community (AEC).

He said that local efforts to strengthen local SMEs will take some time, even with international assistance.

For example, a Deutsche Gesellschaft fur Internationale Zusammenarbeit (GIZ) programme meant to strengthen SMEs is a long term project.

Myint Zaw also criticised lack of access to funding among local SMEs. Japan recently approved an SME lending programme for local companies. But as it is approved on a first-come first-serve basis, many SMEs would be left disappointed.

Local SMEs are subjected to the annual interest rate of about 8.5 percent. In the first national business survey, 97 percent of the over 3,000 respondents were SMEs. Nearly half of them are very small enterprises with fewer than 10 employees. About 30 percent of them employ 10 to 49 employees while 10 percent employ 50-249 employees. Only 3 per cent hires 250 employees or more.

source: Eleven Myanmar
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