Myanmar's SMEs in survival mode, says official
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Local small and medium-sized enterprises (SMEs) are facing tough times with limited access to funding and they are in position to be taken advantage of by foreign partners, said an official of the national trade chamber.
Myint Zaw, joint secretary of the Republic of the Union of Myanmar Federation of Chambers of Commerce and Industry (UMFCCI), openly suggested that local SMEs shun foreign partnerships.
Myanmar has set the year 2015 for SME development while other Asean member countries are joining in light of the Asean Economic Community (AEC).
“It’s better for local SMEs to stand alone, as those from other countries are making an entry,” he said.
His comment was in stark contrast from recent statements made by Win Aung, chairman of the trade chamber.
Myanmar’s market will become more competitive if local businesses partner with appropriate international businesses to establish right-strategy alliances, Win Aung said.
At a seminar on creating positive business partnerships held in March, Win Aung noted economic development is enhancing the demand for foreign partnerships with local businesses.
“We are aiming to grow together with the partners. I call upon everyone to work together. I believe this will elevate our businesses to succeed,” he said.
Myint Zaw noted that at the Tatmadaw (Army) Convention Hall, there have been frequent SME exhibitions hosted by companies from Thailand and Malaysia, as the government opens doors for foreign players.
He said that local efforts to strengthen local SMEs will take some time, even with international assistance.
For example, help from Deutsche Gesellschaft fur Internationale Zusammenarbeit is not meant to create strong SMEs in a short time, as the development programme is long term.
Myint Zaw also criticised the 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 in disappointment. As well, local SMEs are subjected to an annual interest rate of about 8.5 per cent.
In the first national business survey, 97 per cent of the over 3,000 respondents were SMEs. Nearly half of them are very small enterprises with fewer than 10 employees. About 30 per cent of them employ 10 to 49 employees while 10 per cent employ 50-249 employees. Only 3 per cent hire 250 employees or more.
