Myanmar’s small to medium enterprise (SME) owners must not only increase the quality of their products to meet international export standards, but also push to increase domestic consumption, a senior government official said.
“About 85 to 90 percent of the businesses in this country are SMEs. Most are informal family businesses. These businesses are typically not interested in the challenge of exporting their products, and are simply looking to provide for their families,” Dr Wah Wah Maung, deputy director general at Foreign Economic Relations Department under the Ministry of National Planning and Economic Development, said.
In order to grow, businesses need to look for novel products to sell, she added.
“In the Myanmar market, Korean instant noodles have gained popularity, and their market shares have increased. We need to search for other markets for Myanmar products,” said Dr Wah Wah Maung.
One business owner from South Dagon Industrial Zone said that the SME Development Center should support SME businesses in buying essential machines, raising capital, and marketing.
“The Small and Medium Industries Development Bank (SMIDB) gives loans to SME business owners at subsidised interest rates, however, red tape continues to hold SMEs back. Although recently there has been some progress towards reducing regulatory paperwork,” he said.
SMIDB issued K5 billion in loans in 2012, K5 billion in 2013, and K20 billion in 2014. In 2015, K4 billion worth of loans were issued to 80,145 applicants, according to the bank’s data.
U Hla Khaing, an SME owner from Bago division who has a factory in Pyay Industrial Zone, said he has not applied for a loan because he didn’t understand the procedures. Some entrepreneurs say loans have been proven to be too small to effectively expand businesses.
Enterprise owners pointed that SMEs owner will have to produce better products to compete in the upcoming ASEAN Economic Community, which ensures free flow of labour and goods among the 10 member states.
A total of 63 percent of Myanmar SMEs are in the restaurant industry, followed by construction, clothing and trading.