Slow entry of foreign banks hindering SME growth

Some SME businessmen say that they have to brace for more expenses and time in running their businesses, including money transactions with foreign countries, and that they have difficulty obtaining loans.

“Local banks are not benefitting the people most of the time. People will rely on any bank that gives convenient service. Now, it is not easy to take out loans for a business extension and the interest is high -- it is like pulling down fresh entrepreneurs who want to risk starting a business. Moreover, if we pay for advertising our businesses on social networks like Facebook, we have to subscribe abroad. It takes longer to complete a business transaction,” said a young man who started his own business. Currently, some of the large international banks have opened their representative offices in Myanmar.

“It is difficult to say when international banks will be given the full right to operate because it is part of the government’s decision. But it is important for the relevant people to get together and discuss the case further,” said TatsuroNonaka, chief representative at the Yangon office of the Mizuho bank.

He added that they are concerned over the likely delay of Japan’s inflow of investments into Myanmar because they have not received permission for banking.

In a related development, Thailand’s based Kasikornbank is committed to opening a branch in Myanmar once the licence is extended. Nuttaphong Visitkicha-karn, an executive from the Thai bank, said it has proposed the plan to the government, adding that the bank also has plans to cooperate with local partners if it is not allowed to operate as a standalone.