Myanmar needs to intensify its focus on the Micro, Small, and Medium Enterprise (MSME) sector as a critical lever for national economic recovery and long-term sustainability. Recognizing that these enterprises are the backbone of the economy, we need to revitalize the Myanmar MSME Masterplan 2020-2030 and further develop a centralized Myanmar MSME Database.
These initiatives will bridge significant structural gaps—most notably in financing and data—while ensuring that growth is inclusive of rural communities and women-led businesses.
The MSME Sector: A Key Economic Pillar
MSMEs represent approximately 99% of all businesses in Myanmar and employ around 70% of the national workforce. However, their contribution to the Gross Domestic Product (GDP) has historically hovered around 30%. Current strategic efforts aim to significantly boost this figure to bring Myanmar in line with other ASEAN neighbors, where MSMEs contribute much higher shares of GDP.
By fostering local production and import substitution, the strategic plan seeks to transform the MSME sector from a survival-based informal economy into a high-growth engine capable of competing in regional markets.
The Myanmar MSME Masterplan: Vision and Inclusiveness
The development of the strategic masterplan (aligned with the ASEAN Strategic Action Plan for SME Development 2016–2025) focuses on five core areas:
1. Productivity and Innovation: Encouraging the adoption of new technologies to move away from manual labor toward mechanized and digital processes.
2. Market Access: Strengthening the “One Region One Product” (OROP) initiative to promote unique local goods for export.
3. Human Capital: Addressing the labor shortage by training a more skilled workforce, particularly among the 34.8 million working-age citizens.
4. Inclusive Development: A major priority of the plan is ensuring that growth reaches 70% of the population living in rural areas. This includes specific support for agriculture-based MSMEs and livestock initiatives, which are seen as the most effective tools for poverty reduction.
5. Gender Equality: The plan explicitly targets the “gender dividend” by addressing barriers faced by women entrepreneurs, who often reinvest their earnings at higher rates in local communities.
Closing the Financing Gap
One of the most persistent hurdles for Myanmar’s MSMEs is the financing gap, estimated at up to 19% of the national GDP. Formal MSMEs frequently face credit constraints due to:
• High Collateral Requirements: Many small businesses lack the land or assets required by traditional banks.
• Complex Procedures: Onerous administrative hurdles often deter entrepreneurs from seeking formal loans.
• Information Asymmetry: Lenders often lack the data needed to accurately assess the creditworthiness of small firms.
To address this, the government and the Central Bank of Myanmar must further diversify the range of financial instruments, including by promoting digital finance and creating the Myanmar Quick Response (MMQR) system, launched in February 2025, to streamline digital payments and enhance financial inclusion.
The Myanmar MSME Database: Evidence-Based Policy
The cornerstone of these reforms is the creation of a comprehensive Myanmar MSME Database. Previously, policy was often hampered by “inaccurate and incomplete data.”
The database, supported by systems like the Myanmar Enterprise Monitoring System (MEMS), launched in 2017, serves several vital functions:
• Targeted Support: It allows the government to identify which sectors (such as manufacturing vs. services) and regions require the most urgent assistance.
• Registration and Formalization: By encouraging MSMEs to register, the database helps transition informal businesses into the formal sector, giving them better access to government incentives and bank loans.
• Monitoring Progress: It provides a mechanism to track the implementation of the Strategic Plan and evaluate its impact on GDP and employment.
The synchronized strengthening and further development of a Strategic Plan and a robust MSME Database are crucial for the revitalization of Myanmar’s economic landscape. By prioritizing inclusiveness—reaching rural farmers and women-led shops—and tackling the massive financing gap through digital innovation, Myanmar should lay the groundwork for a more resilient and self-sufficient economy.
As these enterprises grow, they will not only meet domestic needs but also help Myanmar recover from conflicts and elevate Myanmar’s standing within the ASEAN economic community.