Myanmar SMEs: Get Ready for Investment! - Building Markets

Myanmar SMEs: Get Ready for Investment!

by Building Markets
April 4, 2016

The economy in Myanmar is rapidly expanding following the political and economic reforms that have opened the market to foreign investment. Positioned between the economic powerhouses of China and India, Myanmar has the potential to develop a robust international market. However, many businesses in Myanmar do not fully understand the process of opening their doors to foreign investment, limiting their ability to get involved. These businesses, especially small and medium size enterprises (SMEs), could greatly benefit from the financial and strategic partnership of an investor, if the immediate information gaps between these two groups are narrowed.

There is a huge opportunity for investors to get involved in this emerging market, although it is not without challenges. In addition to adhering to complex regulations, many business owners unfamiliar with how investment works are wary of potential negative impacts based on common misconceptions. Local businesses are afraid to lose ownership of their business or to have their business undervalued. A change of perspective and greater information to understand the potential benefits of an investment partnership are necessary for SMEs to embrace this mechanism for business growth.

This past February marked the beginning of Building Markets’ fifth Champion Program in Myanmar, entitled SMEs: Get Ready for Investment! The Champion Program works with a group of SMEs over several months to improve their understanding of a specific topic through training, mentoring, and support from experts. This Champion program is designed to provide SMEs with the knowledge of what investors can do for their business, both financially and strategically. It helps SMEs to correctly valuate their business, to learn what investors look for, and to prepare to meet and discuss with investors about a potential partnership.

This two-month program is tailored to SMEs in the manufacturing and service sectors. Trainers for the program include representatives of Building Markets, Anthem Asia, Insitor Management, Myanmar Young Entrepreneurs Association, Yoma Bank, and the British Council. The program, which was introduced by an information session during Global Entrepreneurship Week this past November, has approximately 25 SMEs participating.

SMEs participate in the information session on the Champion Investment Program during GEW in November
SMEs participate in the information session on the Champion Investment Program during GEW in November

The program includes The Investor Game, in which participants evaluate three case studies and are asked if they would invest in these businesses. This session identifies key aspects that investors look for in businesses and is a central theme for the program. The training sessions during the program have covered the benefits of formal banking, budgeting and business planning, leadership and multi-cultural management skills, and how to best utilize investment money. While this program does not facilitate an investment partnership for participants, it prepares SMEs with the necessary information to decide if an investment is best for their business, and provides the tools needed for business owners to have a productive conversation with investors.

The recent elections in Myanmar have generated even more attention from the international community as foreign direct investment continues to flow into the country. The mentoring and training on investment provided by the Champion Program is a necessary first step to bridge the gap between investors and local businesses. Additional initiatives to inform and train SMEs on investment strategies will further prepare this group to fully take advantage of this opportunity.

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