As small and medium enterprises in Myanmar are facing challenges, the Union of Myanmar Federation of Chamber of Commerce and Industry is encouraging small and medium-sized enterprises to pursue digital competency to ensure their long-term survival, a chamber executive member said in an exclusive interview.
Aye Tun, vice president of the chamber’s SMEs Committee and vice president of Myanmar Industries Association, said technology could ensure SMEs of success as they seek to expand in the digital era.
To assist them, the federation and Kasikorn Bank have launched the “KBank Biz Plan Challenge” for digital entrepreneurs.
Training has been underway since June 29 for a competition to be held on August 20. The participants selected will meet successful Thai businesspeople during a trip to Thailand on August 3031, and the winner will receive a US$10,000 prize.
“For Myanmar SMEs to expand overseas, they need to be strong in the domestic market first,” Aye Tun said. “Then they can produce more and let the world know about the quality of made-in-Myanmar goods. It’s time we got out of import dependency. In this regard, technology does matter.”
He believes that creating opportunities, improving access to financing, broadening capacity and exploiting technical knowhow can move the SMEs forward.
Creating opportunities for them is more important than greater access to bank loans.
“Most of the local SMEs’ products can’t compete with imported goods in terms of pricing and technology,” Aye Tun said. “For example, instant noodles imported from neighbouring countries can severely impact noodle businesses here. Likewise, imported goods have also replaced Myanmar longyi [men’s traditional garments] and blankets produced in Monywa.”
Aye Tun wants to see an enabling environment to sustain small-scale businesses owned by Myanmar nationals. The government needs to ensure sustainable local manufacturing and to encourage foreign businesses to enter joint ventures with locals and combat illicit trade that can hamper domestic manufacturing.
“Most local SMEs have to depend on the local market only because they aren’t yet able to expand overseas. It’s a small pie here, and if imported goods flow into the country, they’re likely to acquire a bigger share of the pie. Then it will be out of the question for our SMEs to survive in the long run.”
He said it would be hard for Myanmar goods to penetrate other markets in the region due to various restrictions. And yet goods made in other countries are easily imported into Myanmar.
He urged the authorities to strike a balance between generating more revenue from trade and protecting the interest of local businesses.
“The authorities need to take into serious consideration how large the market is, how great the local demand, how much of that demand can be fulfilled by local businesses. It’s more important than amending the tariff rates. Otherwise, our SMEs will not survive.”
The chamber has helped improve SME access to bank loans in cooperation with local banks and development partners, including the Japan International Cooperation Agency and Germany’s GIZ. With the committee’s recommendation, SMEs can now get loans more easily than ever. Aye Tun also foresees more loans once a credit bureau is established in Myanmar.
The committee is also cooperating with the Ministry of Industry to educate SME entrepreneurs and improve access to financing for mass production.