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

need to be improved and government policies that are conducive towards SMEs sector
should be adopted. Some of these measures include financial sector reform, tightening
monetary and fiscal policy to control inflation, developing and strengthening
institutional and market infrastructures and building up existing institutional
capabilities. These require medium to long-term effort and commitment by the
government. The role of government is essential to improve in all aspects of SMEs
development not just on financing. By taking such appropriate actions, nearly all types
of lending technology can be available from various types of financial institutions and
venture capital funds. This leads to the situation in which SMEs and private sector
would be flourished.
In the short term, the appropriate measures for improving SME credit availability
are: (1) deregulations on banking sectors to a certain extent (e.g., allowing banks to
grant medium- to long-term loans, reducing collateral requirements or allowing new
types of collaterals other than premises) to increase their flexibility, allow the
emergence of new private banks and non-banking institutions, and bring about new
types of banking services; and (2) setting up of a national fund for SME promotion and
using this fund to develop credit guarantee and insurance schemes.
These two measures significantly improve supply-side conditions and SME credit
availability within one or two years. New lending techniques, such as leasing and
factoring, may be available, and account receivables and inventory can also be used as
collateral by supporting them with a credit guarantee scheme. New lending programs,
such as export financing and import financing, can be made possible in this new
context.
In the medium term, the improvement on accounting environment should be
emphasized by setting up accounting standard for SMEs, capacity building for
accounting firms, distribution accounting knowledge, cash flow management and
business plan preparing skills through training causes, workshops and seminars. At the
same time, credit assessment skills and capacity building programs for the staffs in
private banks should be encouraged. Encouraging them to set up SME data base and
initiate to form national wide credit bureau. By doing so, credit scoring method, one of
the economized techniques for making large volume and small number of SMEs loans
can be used in large financial institutions. Organizing national forum to meet SME
owners, bankers and policy makers to discuss and exchange their opinions should also
be initiated.
In the long term, the government attention should turn to equity side of SME
financing by promoting venture capital and regional and village funds to improve SME
credit availability after establishing sufficient lending infrastructures and institutional