Abstract

• The objectives of this study are to identify the external and internal factors influencing the growth of the rice mills in Shwebo District, and to explore the main determinants on this growth. The growth is measured by the output (tons) and assets value. In external factors, government policy, competition, access to finance, financial support and irrigation support influence the growth of rice mills. With regards to internal factors, management experience, location, business plan and employee training are main influencing factors. It is found that the role of government is crucial for setting policy and providing supports for the development of rice mills. Government should use financial transparency to improve information asymmetry between millers and commercial banks and should initiate to provide supporting programs like modern technologies, better water management and road connectivity, access to electricity and affordable credit. For financial institutions, collateral restrictions should be relieved for rice millers. They should expand the type of assets as collateral, including movable and non-movable assets. They should promote financial services to these firms. The owners/managers should attempt to obtain the relevant knowledge and management competency and should also consider importance of demographic characteristics, supply chain, competition and local tax rate in setting up their mills. They need to apply niche differentiation strategy relevant with the nature of firms. They should keep and use financial data to make business decisions and take advice from experts for the survival of their business.