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

Debt Capital
Equity capital
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Two credit bureaus in Thailand —the Central Credit Information Service Co. Ltd
and Thai Credit Bureau—provide information to make better credit decisions for SMEs.
The database is estimated to cover approximately 80 percent of the debtor’s information
in the country. The bureaus disseminate both positive and negative information. To
create an alternative low-cost financing for SMEs, Thailand plans to securitize loan
schemes in the near future.
In Japan, SMEs are considered the foundation of Japanese economy, since they
represent 99 percent of all businesses. Every large corporation in Japan, like Toyota,
Nissan, Yamaha, Suzuki, and Honda, has strong networking relationships with the
SME sector. SMEs contribute over 55 percent to GDP and account for over 70 percent of
the total number of employees in Japan. Their support components and supplies to
large enterprises are competitive in the international marketplace. Financing is also
available from government financial institutions. Private sector financial institutions
and cooperatives actively play in financing SMEs, and these contribute 90 percent of
total financing in this sector. SME loans are guaranteed by credit guarantee
corporations (CGCs) that provide 100-percent guarantee cover on loans made by banks
and financial institutions. The CGCs are funded by local government, industry
organizations, and financial institutions. The contributions made by financial
institutions to CGCs are tax deductible. The CGCs receive further backing from a
government-funded credit insurance system that is implemented by the Japan Small
and Medium Enterprise Corporation (JASME). All SME loans guaranteed by CGCs are
insured by JASMEC, the coverage of which ranges from 70 percent to 90 percent.
Japan practices the scheme of government’s reinsurance on credit guarantee for
loans made to SMEs. The objective of this scheme is to facilitate financing SMEs by
distributing the risk that arises from lending SMEs among various institutions in the
financial system. Figure 6 shows three financial measures for financing the SME sector
in Japan.