ASIA NEWS NETWORK
WE KNOW ASIA BETTER
Slow entry of foreign banks to Myanmar hinders SMEs
Publication Date : 12-05-2014
Small and medium enterprises are facing difficulties because foreign banks have not been permitted to offer full services in Myanmar and are confined to running representative offices.
Some SME businessmen said they have to brace for more expenses and time in running their businesses, including money transactions with foreign countries, and that they have difficulty obtaining loans.
“Local banks most of the time do not benefit locals. It is not easy to take out loans for business expansion and the interest is big so it is like pulling down new entrepreneurs who take the risk in starting their business. Moreover, if we pay for advertising our businesses on social networks like Facebook, we have to subscribe abroad. It takes longer to complete business transactions,” said a young businessman.
Some large international banks have opened their representative offices in Myanmar.
“It is difficult to say when international banks will be given full right to operate because it is the government’s decision," said Tatsuro Nonaka, chief representative for Yangon office of Mizuho bank.
He added that they are concerned for the possible delay of Japan’s inflow of investments into Myanmar because they have not received permission for banking.
“As Japanese businessmen might need to take out foreign-cash loans, we are worried that the delay in our banking will hinder Japan investment,” Nonaka said.
“Foreign banks will not directly compete with local banks; instead they will help improve Myanmar's banking system. Not giving permit for foreign banks will make things worse instead of better,” said an officer of a bank that recently opened an office.