Let’s Boost Cooperation with GIZ

Kyi Tha Maw (SMIDB)
In corporated as a public limited company under the auspices of the Ministry of Industry, the Small & Medium Industrial Development Bank Ltd. (SMIDB) started its operations on February 15, 1996. The main objective for the establishment of the bank is to provide financial support to small and medium enterprises (SMEs) in the country and thereby to support the government’s economic policy.
SMIDB is the sole bank in Myanmar focused on the SME sector. However, the bank operates as a mixed institute, i.e. it combines the elements of a commercial and a development bank. The vision of the bank is to become a leading bank in SME financing. The bank has the following mission:
t 1.   To support SMEs financially
t 2.  To extend technical support
t 3.  To provide good customer service
The first of the above mentioned missions (SME loans) has been traditionally and widely applied by SMIDB in the banking industry. However, the second and third ones are new developments and pose new challenges for Myanmar banks. Due to the complicated process, the local bank itself cannot implement this alone. In pursuing this mission, SMIDB always tries to seek the opportunity to cooperate with international development organizations to understand and follow good international banking practice and to offer special services to SME customers.
In August 2013, all local banks were invited to attend a meeting hosted by Gesellschaftfür Internationale Zusammenarbeit (GIZ), one of the international organizations active in Myanmar. GIZ implements on behalf of the German Government International Cooperation projects in the field of sustainable development in more than 130 countries. Since the return to the country in late 2012, GIZ implements several projects in Myanmar, providing technical assistance in areas such as Financial Sector Development (FSD), Private Sector Development (PSD) and Technical and Vocational Education and Training (TVET).
In the financial sector, GIZ aims to improve the access to financial services in particular for SMEs.One pillar of the project aims at working directly in partnership with selected pilot banks. All Myanmar banks were invited to express their interest to receive comprehensive technical assistance from GIZ. After reviewing its proposal and conducting several interviews, SMIDB was selected as one of the 3 pilot banks. The partnership was formalized by a joint MoU between GIZ and the banks, signed on January 24, 2014. It was agreed that the duration of the cooperation is from April 2014 to September 2015 (18 months in total), with a possible extension. Depending on the specific profiles of the banks, the agreements between the selected banks and GIZ differ from each other.
DSC_0832According to the MoU, a long term international technical expert (LTE) is residing at SMIDB supported by different missions of short term experts (STE). The experts provide consulting and training on banking practices, in particular related to credit provision to SMEs. Therefore, they meet with customers, introduce new institutional settings and provide various trainings to understand good international banking practice.
As such in April 2015 we could mark the first year anniversary of the project and I would like to share the experiences under the project. On the other hand, the 2014 – 2015 fiscal year sets a very significant milestone in the 19 year-history of the bank as a lot of tasks could be achieved with the cooperation of GIZ.
The following trainings have been conducted at the training hubs in Yangon, Mandalay and Nay Pyi Taw and all of them were the first ones of such kind in SMIDB. The main objective was to improve the credit assessment quality of the staff particularly in the credit department.
1.    Financial Literacy Course
2.    Business Plan Preparation
3.    SME Banking Value Chain
4.    Additional Financial Literacy
5.    Additional Business Plan
6.    ToT (Training of Trainers)
7.    Marketing Courses to ToT participants
8.    Monitoring and Recovery
Additionally, SMIDB is a financial institution and works very closely with its customers from the private sector. SMIDB endeavors to offer good services to them and to understand that capacity building significantly contributes to the development of each sector. For these reasons, SMIDB will conduct training courses to its valued customers to share the know-how recently acquired from GIZ.
With the cooperation of GIZ’s Private Sector Development project, 9 SMIDB staff members were trained to train customers in business plan preparation (ToT programme). Under the close supervision of an international CEFE Trainer, coached Business Plan Training to customers by the freshly home-made trainers was successfully conducted in January 2015. By cooperating with GIZ and its customers, SMIDB would like to pave the way for win-win solutions for all parties involved.
One of the participants, the owner of Thamawarnnisa Robe Mart, Daw Su Su Kyaw, commented that “We have over 150 years of traditional business experience as the company is already run in the 3rd generation.  However, we did not realize how to develop a business plan properly by considering various points of view. This training course is of great benefit for all of us.”
Another young lady, who is planning to do business after her graduation and now is still at university said that “I was just about to finish watching a movie named “SUPER QUARTER OF KO TINT” when I received a call from Mom that I had to attend the course at the bank immediately. However, I did not know what kind of course the bank would conduct and just followed the instruction. Finally, I fully realized that if I had missed this class, it would have been a great loss for me. “Thanks to all of you.”
These experiences were the basis for the implementation of the 2nd and 3rd courses which were equally successful with the kind cooperation of GIZ. A total of 41 participants joined in these 3 courses: two in Yangon and one in Mandalay. It is also a milestone of the bank conducting training to its customers. Thanks to GIZ for their great contribution to SMIDB! We highly appreciate the technical cooperation and, accordingly, it is planned to continue to conduct customer training courses at all 3 places.
Additionally, SMIDB feels committed to the responsible finance concept jointly developed with GIZ. As such, the bank
–    selects its borrowers in a transparent credit selection process,
–    makes adequate assessment of clients’ repayment capabilities,
–    measures social and environmental performance and
–    provides respective trainings to its customers and staff members.
In conclusion, there is huge untapped demand for finance in the SME sector and we need to grasp the opportunities in a proactive manner. Under the GIZ project, SMIDB has gained profound benefits, particularly for its staff members. The improvement is not only important for SMIDB itself but also for the banking sector development in general. However, we need to change our mindset, practising traditional banking culture to be in line with good international banking one.

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