Emc stock google finance9/16/2023 In general, SMEs do not make significant use of loans or a line of credit, though those that do are usually larger and growing faster (see figure below). The majority of Cambodian MFIs have transitioned to private sector ownership, whereas in Vietnam, Myanmar and Lao PDR the sector is mainly under government or development sector control and operated for poverty alleviation. In terms of credit, the high level of market penetration in Cambodia is driven by MFIs: excluding the banks that used to be MFIs, other banks have on average just 10 branches. These differences in financing are indicative of the high level of variation between the entrepreneurial ecosystems, both in terms of SMEs’ level of development and the sophistication of the financial sector in each country. In Myanmar and Vietnam, slower growth and smaller firms are more likely to report ‘access to finance’ as their biggest constraint, while in Lao PDR it is larger, faster-growing firms that see it as an issue. The opposite is true of Cambodian SMEs: they have relatively low access to bank loans or lines of credit yet are less likely to report access to finance as a constraint. Access to finance is a relative factor that may be significantly impacted by other constraints that are not directly related to demand and supply of credit.Īccording to 2016 Enterprise Survey data, Vietnamese SMEs are more likely than the other countries to view access to finance as their biggest constraint (see figure below), although Vietnamese SMEs are more likely than other SMEs in other countries to use finance. Similarly, firms’ rankings for their ‘access to finance’ vary considerably across countries and by type of SME, so it is difficult to draw conclusions. In Myanmar and Cambodia these will emerge gradually, as the ecosystem graduates more investible startups. Cambodia is catching up fast, with several launches in the past two years.Īngel networks in Vietnam are developing due to higher quality startup community, but still fragmented. Tech-oriented VC is similarly strongest in Vietnam, followed by Myanmar, which benefits from close ties to Singapore’s VC community. There are no investment managers based in Lao PDR. Reflecting its larger economy, PE is most developed in Vietnam, followed by Cambodia and Myanmar. There is a lack of asset finance across the region. Leasing is growing in each country, though in Lao PDR and Cambodia, much is focused on consumption and not financing SME investment. The Cambodian government by contrast has very limited direct involvement in the provision of financial services and therefore financial support for SMEs. The governments of Vietnam, Lao PDR and Myanmar are more involved in the provision of finance to SMEs, reflecting a history of state control. In other countries, MFI networks and loan sizes are limited due to regulation. Cambodia has the most extensive network, and MFIs are increasingly a viable finance alternative for SMEs. Banks can cover only a small part of the investment needed by SMEs. However, they tend to serve larger corporate clients and operate in larger urban areas. Banksīanks are well-represented in each country. The availability of financial services for SMEs in the Mekong region varies a great deal from country to country, especially in terms of credit, investment and the role of government. In-depth country studies were undertaken in Cambodia, Lao PDR, Myanmar and Vietnam. We used the ANDE framework for analysing countries’ entrepreneurial ecosystems. The study was commissioned to better understand the ‘missing middle’ in the Mekong region – those businesses that have outgrown microfinancing but do not yet have access to conventional financial services. This post on the financing gap is based on EMC Consulting’s 2018-19 work for the Dutch Good Growth Fund (DGGF) ‘ Investment Fund Local SMEs’, an initiative of the Dutch Ministry of Foreign Affairs.
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