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Challenges to small and medium-size businesses in Myanmar: What are they and how do we know?

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  • Kapteyn, Arie
  • Wah, Saw Htay

Abstract

We conducted a field survey of owners of small and medium enterprises (SMEs) in Yangon, Myanmar to investigate obstacles to business development in the region. The analysis focuses on access to credit, public services, and electricity. We find that relaxing loan collateral requirements is considered of prime importance, while access to bank loans is seen as problematic (equivalent to a 19 percentage point increase in the interest rate). Yet despite their widespread appeal to governments and donors, SME loans are found to have no discernible impact on perceived access to credit. Access to public services is hampered by cumbersome and time consuming procedures, often necessitating daylong trips to the capital for administrative procedures. Streamlining such procedures could yield annual savings of up to US $4700 per business. With regard to electricity, the biggest problems are installing new connections and the unreliability of supply. For benchmarking of concerns, we showed respondents vignettes describing hypothetical businesses facing a particular difficulty, and asked them to rate the gravity of the problem. Although we find some differences in response scales across socio-economic and ethnic groups, the qualitative conclusions about which problems are most important generally hold. This suggests that broad-based policy intervention aimed at easing a particular difficulty can be implemented.

Suggested Citation

  • Kapteyn, Arie & Wah, Saw Htay, 2016. "Challenges to small and medium-size businesses in Myanmar: What are they and how do we know?," Journal of Asian Economics, Elsevier, vol. 47(C), pages 1-22.
    • Handle: RePEc:eee:asieco:v:47:y:2016:i:c:p:1-22
    DOI: 10.1016/j.asieco.2016.08.004
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    References listed on IDEAS

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    Cited by:

    1. Han, Myat Su & Chen, Weiming, 2021. "Determinants of eco-innovation adoption of small and medium enterprises: An empirical analysis in Myanmar," Technological Forecasting and Social Change, Elsevier, vol. 173(C).
    2. Dall'Aglio,Chiara & Hayati,Fayavar & Lee,David James, 2020. "Measuring the Biases, Burdens, and Barriers Women Entrepreneurs Endure in Myanmar," Policy Research Working Paper Series 9451, The World Bank.
    3. Ruramayi Tadu & Douglas Chiguvi, 2020. "The Impact of Family Governance on the Sustainability and Continuity of Family Businesses in Botswana," International Journal of Marketing Studies, Canadian Center of Science and Education, vol. 11(4), pages 113-113, March.
    4. Henrik Hansen & John Rand & Finn Tarp & Neda Trifkovic, 2021. "On the Link Between Managerial Attributes and Firm Access to Formal Credit in Myanmar," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 33(6), pages 1768-1794, December.
    5. Henrik Hansen & John Rand & Finn Tarp & Neda Trifković, 2019. "Managerial attributes and enterprise access to formal credit in Myanmar," WIDER Working Paper Series wp-2019-20, World Institute for Development Economic Research (UNU-WIDER).

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