Title Financing Small and Medium Enterprises in Myanmar Author(s ...

following reasons 7 :
• SMEs contribute to employment growth at a higher rate than larger firms
(around 50 percent to 70 percent in developing countries, 72 percent in
Japan, and 66 percent in EU);
• The private sector, particularly SMEs, form the backbone of a market
economy and, in the long-term, may provide most of the employment in the
transition economies;
• Support for SMEs will help restructure large enterprises by streamlining
manufacturing complexes. Units with no direct relation to the primary
activity are sold off separately as in the cases of privatization of state
economic enterprises (SEEs) in East European countries;
• SMEs curb the monopoly of the large enterprises and offer services
complementary that those offered by big businesses, and absorb fluctuations
in a modern economy;
• Through inter-company cooperation, SMEs raise the level of skills with their
flexible and innovative nature. Thus, SMEs can generate important benefits
in terms of creating a skilled industrial base and industries, and developing
a well-prepared services sector capable of contributing to GDP through
higher value-added services;
• Small industrial enterprises produce predominantly for the domestic market,
generally relying on national resources;
• The structural shift from the former large state-owned enterprises to small
and private SMEs will increase the number of owners, a group that
represents greater responsibility and commitment than in the former
centrally planned economies;
• An increased number of SMEs will bring more flexibility to society and the
economy and might facilitate technological innovation, as well as provide
significant opportunities for the development of new ideas and skills; and,
• SMEs use and develop predominantly domestic technologies and skills.
Moreover, by utilizing slack labor, SMEs in rural areas contribute significantly to
rural development in the form of poverty alleviation. They can easily recruit poor
laborers in rural areas during lean season. Rural SMEs promote a closer working
relationship between employer and employees and provide social benefits to poor
families.
7 Antal Azabo, The role of governments in the promoting small and medium sized enterprises countries
in transition, 1996