Abstract

• SMEs dominate most of Myanmar’s economic sectors, accounting for 90 percent of the industrial sector and 99 percent of the manufacturing sector. Myanmar has to develop its Small and Medium enterprises (SMEs) sector in order to become competitive with neighboring countries. But SMEs in Myanmar encounter the poor infrastructure, limited market access, outdated technology, low skill and productivity levels and a lack of business development services including inadequate access to finance. SMEs in Myanmar are hindered from reaching their full potential and bringing the widespread benefits of socioeconomic development to its people. Myanmar has gradually begun to open up its markets since Myanmar adopted the market economy. The development of SMEs is an effective mechanism in achieving socioeconomic growth. The country has gone through dramatic changes since 1990. Myanmar has opened its doors for foreign investment across sectors. Therefore the financial sector can fulfill to thrive for SMEs. Microfinance in Myanmar was introduced in 1997 as a separate project under UNDP’s Human Development Initiative (HDI) in eleven townships. The main objective of the project has been to progressively develop locally managed self-sustaining microfinance operations to serve the needs of poor households. The UNDP microfinance project in Myanmar is servicing more than 440,000 clients, of whom ninety seven percent are women. The programme is one of the largest and most successful in the world and ranked 20th among all microfinance programmes worldwide. The micro-lending operations have a huge impact on the poor, benefiting particularly women who enter into business of their own and are having income of their own. . This study examines opportunities available for SMEs to obtain funding for sustainable development for SMEs. The study also identifies current challenges that restrain access to finance for SMEs in Myanmar.