Asia SME Monitor 2020 - Asian Development Bank

1 Asian Development BANKAsiAn Development BAnk6 ADB Avenue, Mandaluyong City1550 Metro Manila, small and medium - sized enterprise Monitor 2020 Volume I Country and Regional ReviewsThe Development of micro, small , and medium - sized enterprises (MSMEs) remains key to promoting inclusive growth in developing economies in asia and the Pacific. The asia small and medium - sized Enter-prise Monitor (ASM) provides data and analysis as a resource for evidence-based policy design on MSME Development . The ASM 2020 focuses on Southeast asia and this first volume reviews the financial and non-financial conditions of MSMEs at country and regional level. In future years, the ASM will expand its country coverage to other the Asian Development BankADB is committed to achieving a prosperous, inclusive, resilient, and sustainable asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members 49 from the region.

2 Its main instruments for helping its developing member countries are policy dialogue, loans, equity investments, guarantees, grants, and technical I COUNTRY AND REGIONAL REVIEWSOCTOBER 2020 asia small ANDMEDIUM- sized ENTERPRISEMONITOR 2020 Asian Development BANKVOLUME I COUNTRY AND REGIONAL REVIEWSOCTOBER 2020 asia small ANDMEDIUM- sized ENTERPRISEMONITOR 2020 Creative Commons Attribution IGO license (CC BY IGO) 2020 Asian Development Bank6 ADB Avenue, Mandaluyong City, 1550 Metro Manila, PhilippinesTel +63 2 8632 4444; Fax +63 2 8636 rights reserved. Published in 2020. ISBN 978-92-9262-421-7 (print); 978-92-9262-422-4 (electronic); 978-92-9262-423-1 (ebook)Publication Stock No. TCS200290-2 views expressed in this publication are those of the authors and do not necessarily reflect the views and policies of the Asian Development Bank (ADB) or its Board of Governors or the governments they represent.

3 ADB does not guarantee the accuracy of the data included in this publication and accepts no responsibility for any consequence of their use. The mention of specific companies or products of manufacturers does not imply that they are endorsed or recommended by ADB in preference to others of a similar nature that are not making any designation of or reference to a particular territory or geographic area, or by using the term country in this document, ADB does not intend to make any judgments as to the legal or other status of any territory or work is available under the Creative Commons Attribution IGO license (CC BY IGO) By using the content of this publication, you agree to be bound by the terms of this license. For attribution, translations, adaptations, and permissions, please read the provisions and terms of use at # CC license does not apply to non-ADB copyright materials in this publication.

4 If the material is attributed to another source, please contact the copyright owner or publisher of that source for permission to reproduce it. ADB cannot be held liable for any claims that arise as a result of your use of the contact if you have questions or comments with respect to content, or if you wish to obtain copyright permission for your intended use that does not fall within these terms, or for permission to use the ADB to ADB publications may be found at : In this publication, $ refers to United States recognizes Hong Kong as Hong Kong, China; China as the People s Republic of China; Korea as the Republic of Korea; Vietnam as Viet Nam; and Hanoi as Ha design by Claudette Rodrigo. ContentsTables, Figures, and Boxes ivForeword ixAcknowledgments xData Contributors xiAbbreviations xivRationale and Methodology 1 Highlights 6 Regional Review.

5 Southeast asia 10 Country Reviews1. Brunei Darussalam 542. Cambodia 713. Indonesia 924. Lao People s Democratic Republic 1175. Malaysia 1356. Myanmar 1577. Philippines 1768.

6 Singapore 1999. Thailand 21410. Viet Nam 237 Tables, Figures, and BoxesTables Regional MSME Definitions in Southeast asia Assistance and Infrastructure for MSME Access to Finance Financial Infrastructure Policies and Regulations 40 Brunei MSME Definition MSME Landscape Bank Credit Nonbank Finance Policies and Regulations MSME Definition MSME Landscape Bank Credit Nonbank Finance Capital Markets Policies and Regulations MSME Definition MSME Landscape Bank Credit Public Finance and Guarantees Nonbank Finance Capital Markets Listing Requirements Indonesia Stock Exchange Policies and Regulations 115 Lao People s Democratic MSME Definition MSME Landscape Bank Credit Nonbank Finance Capital Markets Policies and Regulations 134 vTables, Figures.

7 And MSME Definition MSME Landscape Bank Credit Public Finance and Guarantees Nonbank Finance Capital Markets Listing Requirements Bursa Malaysia Policies and Regulations SME Definition SME Landscape Bank Credit Nonbank Finance Capital Markets Policies and Regulations MSME Definition MSME Landscape Bank Credit Compliance with MSME Loans Required Microfinance Exposures of Microfinance-Oriented and Engaged Banks Retail Loans to Barangay Micro Business Enterprises Public Finance and Guarantees Nonbank Finance Capital Markets Listing Requirements Philippine Stock Exchange Policies and Regulations SME Definition SME Landscape Bank Credit Nonbank Finance Capital Markets Policies and Regulations MSME Definition MSME Landscape Bank Credit Public Finance and Guarantees Credit Guarantee Schemes Thai Credit Guarantee Corporation Nonbank Finance Capital Markets Listing Requirements Stock Exchange of Thailand Policies and Regulations 235viTables, Figures, and BoxesViet MSME Definition MSME Landscape Bank Credit Nonbank Finance Capital Markets Listing Requirements Hanoi Stock Exchange Policies and Regulations 257 Figures Rationale and Key Components of the asia SME Monitor Data Processing Flow 5 Regional Number of MSMEs Employment by MSMEs MSME Contribution to Gross Domestic Product MSME Exports Mobile and Internet Penetration, 2018 Bank Credit MSME Nonperforming Loans Credit Guarantees.

8 2018 and 2019 Nonbank Finance Nonbank Finance Institutions Nonperforming Financing Equity Markets for MSMEs 34 Brunei Number of MSMEs Employment by MSMEs MSME Contribution to Gross Domestic Product Bank Loans MSME Loans Nonbank Finance Number of MSMEs Employment by MSMEs Bank Loans Nonbank Finance Equity Market Number of MSMEs Employment by MSMEs MSME Contribution to Gross Domestic Product MSME Exports MSME Loans 100viiTables, Figures, and Credit Guarantees Kredit Usaha Rakyat Nonbank Finance Peer-to-Peer Lending in Indonesia Equity Market 107 Lao People s Democratic Number of MSMEs Employment by MSMEs MSME Loans Nonbank Finance Equity Market Number of MSMEs Employment by MSMEs MSME Contribution to Gross Domestic Product MSME Exports MSME Loans Public Finance and Guarantees Nonbank Finance Equity Markets Number of SMEs Employment by Enterprises SME Loans SME Loans small and medium Industrial Development Bank Nonbank Finance Microfinance Institutions Equity Market Number of MSMEs Employment by MSMEs MSME Loans Public Finance and Guarantees Nonbank Finance Equity Market Number of SMEs Employment by SMEs SME Value Added SME Loans Nonbank Finance Finance Companies Equity Market 207viiiTables, Figures.

9 And Number of MSMEs Employment by MSMEs MSME Contribution to Gross Domestic Product MSME Exports and Imports MSME Loans Credit Guarantees Thai Credit Guarantee Corporation Number of Nonbank Finance Institutions Equity Markets 225 Viet Number of MSMEs Employment by MSMEs Bank Loans Nonbank Finance Equity Market 249 Boxes Gojek Supports MSME Growth in Indonesia Bahana Alta Ventura Channels Government Programs to Support MSMEs Technology Park Malaysia Supports Technology-Based MSMEs The National Innovation Agency Supports Technology-Based Innovation by MSMEs 228 ForewordAsia s robust and sustainable economic growth has helped alleviate poverty and transformed many low-income countries into middle-income economies. The growth momentum in developing asia , however, has gradually decelerated since 2018 due to increasing global trade tensions, economic uncertainty, and the coronavirus disease (COVID-19) shock.

10 Our region faces greater downside risks to its economic outlook, which currently forecasts a healthy rebound in 2021 from this year s contraction. But the economic disruption has also energized several opportunities. At the national level, micro, small , and medium - sized enterprises (MSMEs) can play a more central role in recovering from economic contraction and promoting sustainable economic growth in asia and the are the backbone of asia s economy. They stimulate domestic demand, create jobs, innovate and compete nationally, and potentially, regionally. Access to finance and expanded markets remain at the core of MSME growth. asia s economic transformation and pandemic recovery offer the chance to accelerate business opportunities for MSMEs to learn how to digitize and embrace digital financial services and e-commerce, without abandoning the traditional MSME strengths in wholesale and retail trade, agribusiness, food processing, accommodation, and other service-related business.