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

Figure 3 Spectrum of SME Lending Methods
Information-rich environnent Opaque information
environnent
(Lending Methods)
Financial statement lending, credit scoring, factoring, leasing, asset-based lending,
relationship-based lending
Large financial institutions
Small financial institutions
Source: author
Apart from the aforementioned lending methods, there are some additional
lending programs already initiated or will be initiated by governments and banks in
some countries like Malaysia and Thailand, which provide better access to financing for
their SMEs sectors. For example, Bank Industir & Teknologi Malaysia Berhad offers
various Islamic financing facilities. These facilities include import trade financing
facility (Murabahah), export financing scheme (Murabahah), installment sale (Bai
Bithaman Ajil), and leasing (AIijara). Under import trade financing facility, banks offer
a program for Malaysian companies that would want to import commodities and goods
for their operations. A bank purchases the goods directly from the suppliers and resells
them to the beneficiary against the profit margin to be determined by the bank. The
beneficiary is allowed to pay the purchase price on a deferred basis or lump sum. And
also, under the export financing scheme, the financing is extended to overseas importers
under which the bank undertakes to purchase goods from Malaysian exporters and
resells the good to overseas importers against the profit margin to be determined by the
bank. Overseas importers are allowed to make payments on deferred basis, either one
lump sum or installment basis. 70
A suggestion to improve financial access for regionally startup SMEs is the
establishment of a regional/communal fund. Since venture capital industry is well
developed in many Asian countries, such kind of venture capital scheme can provide
benefit to regionally startup SMEs that hunger financing (Figure 4).
70 Information outreach by SME Information & Advisory Centre, SMIDEC, Malaysia, November 2007