- By Arkar Hein
A nation needs to have strategic plans to increase domestic and foreign investments, as well as set the groundwork for homegrown small and medium enterprises (SMEs) to grow so that nationwide development will take effect. With that in mind, the Yangon Region Government is working to drive up SME growth in tandem with performances from its economic zones, including Thilawa SEZ.
“We are compiling a list of SMEs in the Yangon Region so that we can better assist them, and we will begin collecting data from South Dagon Township, after which we will arrange for them to be able to take out loans,” said Region Chief Minister U Phyo Min Thein at a meeting with the business community on 23 September this year.
Supplying loans to 40 businesses
There are currently more than 40,000 SMEs operating in Yangon Region and the regional government is planning to provide a hundred of these small businesses with loans as the first batch of a credit plan. They have already given out loans to 40 SMEs and are arranging to provide loans to the remaining 60.
The local government will provide training so that the SMEs can use their loans effectively and record their accounts systematically. The training courses to assist the development of SMEs were conducted in line with requests from the regional small businesses.
So far, the regional General Administration Department has selected 300 SMEs and the Department of SME Development has selected 122 SMEs in the Yangon Region and all of them have received loans.
Arranging the loans
Authorities are continuing to select 100 SMEs from the Yangon Region to provide them with loans. They are compiling a list of SMEs with high potential at the same time. The main aim is on small businesses in the travel, fishery, sculpture and lacquerware sectors.
The compilation of the SME list will begin from South Dagon and will use a pilot project to achieve the desired results and will begin from the industrial sector and industrial zone, according to U Phyo Min Thein. He said they will employ technical components to ensure the list is accurate and organized.
The regional government will be including small businesses opened or operating from households into the SME list, which means they will be eligible for acquiring loans. This is done because the SMEs play a vital role in the national economy and developing them means the same as developing the nation.
The Yangon Region Government will strive to provide systematic loans to the SMEs in its jurisdiction. SMEs make up 97 per cent of the national production. There are 120,000 registered businesses in Myanmar and 98 per cent of them are SMEs, according to statistics from the Directorate of Industrial Supervision & Inspection and the SME Development Department.
Domestic banks provide loans too
“The Yangon Region Government is working hard to provide loans to the SMEs in the region,” Chief Minister U Phyo Min Thein reiterated to media professionals after a meeting with the Investment Committee on 29 August earlier this year. The actual process will involve the regional government backing the SMEs for domestic banks who will be actually providing the loans.
Generally, SMEs can acquire a loan between K20-K50 million without the need to provide collateral and SMEs with larger projects can provide collateral to acquire loans in the hundred million kyats range. It will be the banks’ decision to decide which type of loans an SME is applicable for after a deep scrutinization process.
The multisectoral and balanced development of Yangon depends strongly on the wellbeing of the SMEs in Yangon Region. Thus, support given to SMEs are a boost to Yangon’s development as well.
(Translated by Pen Dali)