PDF Asia SME Finance Monitor 2014 - Asian Development Bank

ASIA SME FINANCE MONITOR 2014

ASIAN DEVELOPMENT BANK

ASIA SME FINANCE MONITOR 2014

ASIAN DEVELOPMENT BANK

Creative Commons Attribution 3.0 IGO license (CC BY 3.0 IGO)

? 2015 Asian Development Bank

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Cataloging-In-Publication Data

Asian Development Bank. Asia SME finance monitor 2014.

Mandaluyong City, Philippines: Asian Development Bank, 2015.

1. Small and medium-sized enterprises. I. Asian Development Bank.

2. SME finance.

3. SME sector development.

4. Asia.

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Contents

Foreword Acknowledgments List of Data Contributors Abbreviations

Rationale and Methodology

Highlights

Regional SME Finance Update SME Landscape Banking Sector Nonbank Sector Capital Markets Policy and Regulation

Thematic Discussion: Mobile Technology for Financing SMEs in Asia and the Pacific: Challenges and Opportunities

Country Reviews Central Asia Kazakhstan Kyrgyz Republic Tajikistan East Asia People's Republic of China Republic of Korea Mongolia South Asia Bangladesh India Sri Lanka Southeast Asia Cambodia Indonesia Lao People's Democratic Republic Malaysia Myanmar Philippines Thailand Viet Nam Pacific Fiji Papua New Guinea Solomon Islands

Appendix: SME Definitions

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7

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45 47 57 69 75 77 89 102 121 123 136 149 159 161 169 182 192 203 213 227 239 249 251 267 284

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Foreword

S ustainable economic growth, poverty reduction, and social equality--with their balanced promotion--are key factors to achieving inclusive growth at the national level across Asia and the Pacific. Broadening access to economic and business opportunities for the traditionally underserved socioeconomic sections of the region, including low-income households and small and medium-sized enterprises (SMEs), can improve social welfare and boost national productivity. The business environment around SMEs has rapidly changed at the national, regional, and global levels. Economic integration, such as the Association of Southeast Asian Nations (ASEAN) Economic Community and the Eurasian Economic Union, will encourage the liberalization of trade and investment across borders. This integration will also promote the structural change of SME business models, from the traditionally domestic to the globally competitive, but this requires new financing solutions for SMEs to survive and grow.

Finance is a critical element of national SME sector development. In particular, it is crucial to develop innovative financing models that go beyond traditional bank lending, to provide timely financing opportunities for SMEs according to their needs and stages of business growth. As national economies advance, the number of growthoriented SMEs steadily increases, with a growing requirement for access to long-term growth capital. SME sector development is a cross-cutting area in wider global agendas such as climate change, gender empowerment, and poverty reduction. SME financing needs to cope with such cross-sectoral issues as green finance, agriculture finance, and financing of women-led SMEs. Policymakers and regulators are required to respond to new financing modalities that include crowdfunding, asset-based finance, cluster financing, and capital market financing. They are also required to develop an extensive knowledge base on SME access to finance, while sharing best practices to promote evidence-based policymaking.

With these objectives in mind, the Asian Development Bank (ADB) launched the pilot Asia SME Finance Monitor (ASM) in April 2014. This inaugural ASM covered 14 ADB developing member countries (DMCs) and comprehensively reviewed five areas: SME landscape, banking sector, nonbank sector, capital markets, and policy and regulation. The target beneficiaries of the ASM are government authorities responsible for SME development and access to finance to support evidence-based SME policies in DMCs.

With the success of the inaugural volume of the ASM, this edition extended the coverage countries to 20 DMCs across five ADB regions. We hope this publication helps improve SME access to finance by enhancing evidencebased policymaking on SME finance, and encourages policy discussions on scaling up SME finance in DMCs.

Ma. Carmela D. Locsin Director General Sustainable Development and Climate Change Department Asian Development Bank

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Acknowledgments

The Asia SME Finance Monitor 2014 was prepared by Shigehiro Shinozaki, financial sector specialist of the Sustainable Development and Climate Change Department (SDCC) of the Asian Development Bank (ADB), together with the Asia SME Finance Monitor Team. The team comprised Tanner Chaiken, Shreyans Jain, Konstantin Dorofev, Connie T. Delos Santos, and Junray Bautista. This project was supervised by Noritaka Akamatsu, acting Technical Advisor (Finance) and senior advisor of SDCC. Administrative support was provided by Raquel Borres and Valene L. Clemente.

Asia SME Finance Monitor Team

Shigehiro Shinozaki: Team Leader, Financial Sector Specialist (SME Finance), Sector Advisory Service Division, Sustainable Development and Climate Change Department, ADB. Shigehiro was the author of the sections Rationale and Methodology, Highlights, and Regional SME Finance Update, as well as country papers for Mongolia, Indonesia, Lao PDR, Myanmar, Thailand, and Viet Nam. Shigehiro also initially edited all country papers. Tanner Chaiken: ADB Consultant, Sydney. Tanner was the author of the section Thematic Discussion (Mobile Technology for Financing SMEs in Asia) as well as country papers for Fiji, Papua New Guinea, and Solomon Islands. Shreyans Jain: ADB Consultant, India. Shreyans was the author of country papers for Bangladesh, India, and Sri Lanka. Konstantin Dorofev: ADB Consultant, Kazakhstan. Konstantin was the author of country papers for Kazakhstan, Kyrgyz Republic, and Tajikistan. Connie T. Delos Santos: ADB Consultant, Philippines. Connie was the author of country papers for the Republic of Korea, Cambodia, Malaysia, and the Philippines. Junray Bautista: ADB Consultant, Philippines. Junray was the author of the country paper for the People's Republic of China.

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List of Data Contributors in Participating Developing Member Countries of the Asian Development Bank

Country

Data Contributors

Bangladesh

ISLAMI Bank; BRAC Bank; Dhaka Stock Exchange; Bangladesh Bank; Micro Credit Regulatory Authority; Industrial Development Leasing Company of Bangladesh; Business Initiative Leading Development; SME Foundation; Bangladesh Small and Cottage Industries Corporation; Bangladesh Bureau of Statistics; Palli Karma Sahayak Foundation; Bangladesh Ventures

Cambodia

Cambodia Securities Exchange; National Institute of Statistics; National Bank of Cambodia

China, People's Republic Asian Development Bank (ADB) Resident Mission, PRC of (PRC)

Fiji

Bank of South Pacific; Reserve Bank of Fiji; Fiji Development Bank; Bred Bank; National Center for Small and Micro

Enterprise Development; HFC Bank; South Pacific Stock Exchange; Fiji Commerce and Employers Federation; Merchant

Finance; Credit Corporation; ANZ Bank; Ministry of Industry and Trade; Kontiki Capital

India

Reserve Bank of India; Bombay Stock Exchange; National Stock Exchange; Ministry of Micro, Small and Medium Enterprises; Small Industries Development Bank of India

Indonesia

Bank Indonesia; Financial Services Authority; Ministry of Cooperatives and SMEs

Kazakhstan

National Fund Damu; National Bank of Kazakhstan; Baiterek; National Chamber of Entrepreneurs; Agency for Statistics; Association of Microfinance Organizations

Korea, Republic of

Small and Medium Business Administration; Financial Supervisory Service; Korea Exchange; Korea Venture Capital Association

Kyrgyz Republic

National Bank of Kyrgyz Republic; National Statistical Committee; Association of Guarantee Funds; Kyrgyz Stock Exchange; Investment Promotion Agency under the Ministry of Economy; Association of Microfinance Organizations

Lao, People's Democratic Ministry of Industry and Commerce; Ministry of Finance; Lao National Chamber of Commerce; Lao Development Bank; Republic of (Lao PDR) Bank of the Lao PDR; Lao Securities Exchange; Lao Statistics Bureau

Malaysia

Bursa Malaysia; SME Corporation; Bank Negara Malaysia

Mongolia Myanmar Papua New Guinea (PNG)

Philippines Solomon Islands

Sri Lanka

Tajikistan Thailand Viet Nam

Bank of Mongolia; Credit Guarantee Fund of Mongolia; Financial Regulatory Commission; Mongolian National Chamber of Commerce and Industry; Ministry of Industry; Xac Leasing

Central Department of SME Development; Ministry of National Planning and Economic Development; Central Statistics Department; Ministry of Finance; Central Bank of Myanmar

Securities Commission of PNG; Department of Trade, Commerce and Industry; Bank of South Pacific; Central Bank of PNG; Credit Corporation; PNG Microfinance Limited; Nationwide Microbank; IBBM Enterprise Center; National Development Bank; Investment Promotion Authority; Port Moresby Chamber of Commerce and Industry; PNG Chamber of Commerce and Industry; Small Business Development Corporation; Kina Securities; Port Moresby Stock Exchange

Bangko Sentral ng Pilipinas; Bureau of Micro, Small and Medium Enterprise Development; Department of Trade and Industry; Philippine Stock Exchange; Small Business Corporation

Bank of South Pacific; Central Bank of Solomon Islands; Credit Corporation; Solomon Islands Chamber of Commerce and Industry; Ministry of Commerce, Industry, Labour and Immigration; Solomon Islands National Provident Fund; Solomon Islands Small Business Enterprise Centre; South Pacific Business Development; Company Haus of Solomon Islands

Central Bank of Sri Lanka; Colombo Stock Exchange; Ministry Finance and Planning; Ministry of Traditional Industries and Small Enterprise Development; Federation of Chamber of Commerce and Industry of Sri Lanka; Department of Census and Statistics; National Enterprise Development Authority; Soft Logic Finance

Entrepreneurship Support Fund; Chamber of Commerce and Industry; National Bank of Tajikistan; Agency on Statistics (Tajstat)

Bank of Thailand; Office of Small and Medium Enterprises Promotion; Thai Credit Guarantee Corporation; Stock Exchange of Thailand; Securities and Exchange Commission

Agency of Enterprise Development under the Ministry of Planning and Investment

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