Investment from HK on the rise
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Hong Kong's investment in Myanmar reached US$6.5 million in the 2012-13 fiscal year, according to the Directorate of Investment and Companies Administration.
This showed a big increase from $5.9 billion in the 2010-11 fiscal year.
Much of the investment went to the manufacturing factories, as endorsed by the Myanmar Investment Commission. The manufacturing facilities are either directly owned by the investors or through joint ventures with local partners.
Recently this year, the MIC also approved the direct investment of Hong Kong investors for the production of wedding and lace costumes and garment accessories in Yangon Region’s Mingaladon industrial zone.
Western Union expands business
Western Union has expanded its remittance business in Myanmar under the cooperation with nine local banks.
The financial services operator last week celebrated the first anniversary.
“According to statistics, Myanmar has more than two million workers working abroad. It’s one of the countries with a large number of migrants workers in the world. The international remittance is a very important service for them,” said Nguyen Thi Nhu Ly, country director for Myanmar Western Union.
The nine local banks namely Ayeyarwady Bank, Co-operative Bank, First Private Bank, Kanbawza Bank, Myanmar Apex Bank, Myanmar Treasure Bank, Myanmar Oriental Bank, United Amara Bank and Yoma Bank. With combined 460 outlets, they will serve as local agents where clients can send and receive money.
Western Union will soon work with the Co-operative Bank to reach out to the mountainous Chin State.
Banks ponder mobile banking
First Private Bank, Cooperative Bank, Innwa Bank, Myawady Bank, Ayeyawady Bank, Rural Development Bank, Myanmar Citizens Bank and some other banks have sought approvals for mobile banking services, according to the Central Bank of Myanmar.
The services will be processed through the network of Myanmar Post and Telecommunication. Myanmar is expected to raise the convenience of banking customers after the opening of the mobile banking services.
An official at the central bank noted that most local banks are incapable of such services, and some need to reapply for the approval.
Myanmar’s SMEs in survival mode, says official
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.
