National Dissemination Workshops on

“Access to Finance” for Small and Medium-Sized Enterprises

(SMEs) in Freight Transport and Logistics Sector in Myanmar,

Thailand, and Viet Nam

The Project on “Sustainable Freight Transport and Logistics in

the Mekong Region”

WORKSHOP PROCEEDINGS

JULY 2018

MEKONG INSTITUTE (MI)

Khon Kaen, Thailand

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ACKNOWLEDGEMENTS

Mekong Institute (MI) would like to express its sincere thanks to all small and medium

enterprises (SMEs) from freight transport and logistics sector in Myanmar, Thailand and

Vietnam, and the representatives from Thai International Freight Forwarders Association

(TIFFA), Myanmar International Freight Forwarders’ Association (MIFFA), and Vietnam

Freight Forwarders Association (VIFFAS), for attendance and contribution to the three

National Dissemination Workshops on “Access to Finance for SMEs in Freight Transport and

Logistics Sector in Rayong, Yangon, and Ho Chi Minh City on June 26, 26, and July 12,

2018, respectively.

MI would like to thank the speakers from (i) Asia Sermkij (ASK) Leasing, Kasikorn Bank,

Hino Motor Sales Thailand Co., Ltd, Scania Siam Co., Ltd, Thailand; (ii) CB Bank and MAN

Truck and Bus, Myanmar, and (iii) Hino Motor Vietnam, Sacombank Leasing Company, and

TP Bank (Automobile Finance Centre), Viet Nam for contributions during the interview

meetings of the study and their presentations during the national dissemination workshops

respectively.

The three workshops and the project as a whole cannot be accomplished without the

support, cooperation and collaboration of the project staff members from GIZ in Bangkok,

the project co-implementers, Mekong Institute, and the Greater Mekong Sub-region

Business Forum (GMS-BF).

Lastly, our sincere appreciation also goes to the project team of MI Trade and Investment

Facilitation (TIF) Department for their valuable inputs and arrangements for the project work,

and all MI staff for their support and assistance.

Trade and Invest Facilitation (TIF) Department

Mekong Institute

July 2018

28

28

Vietnam Logistics Association (VLA)

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EXECUTIVE SUMMARY

The three (03) national dissemination workshops were held in Thailand, Myanmar and

Vietnam in June and July 2018 to disseminate the findings of the study on “Access to

Finance for SMEs in Freight Transport and Logistics Sector” by Mekong Institute (MI) in

collaboration with Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH,

following the completion of the desk study and technical consultation process with the

selected financial institutions, leasing companies, truck technology suppliers, and associated

stakeholders in the Thailand, Myanmar, and Viet Nam.

The study is an integral part of the project on “Green Freight Transport and Logistics in the

Mekong Region” supported by the European Union, and jointly implemented by GIZ, MI and

the Greater Mekong Sub-region Business Forum (GMS-BF).

The first workshop was organized in Rayong, Thailand on June 26, 2018 in collaboration

with the Thai International Freight Forwarders Association. This was followed by the

workshop in Yangon, Myanmar on June 28 with the support of the Myanmar International

Freight Forwarders’ Association. The last leg of the workshop was held in Ho Chi Minh,

Vietnam on July 12 in cooperation with the Vietnam Freight Forwarders’ Association.

The national workshops provided freight transport and logistics SMEs with the information on

banking and leasing products and services. The workshops also introduced upgrading and

new trucking technologies and best practices to enhance the efficiency of trucking and

logistics operations in terms of fuel efficiency; and offered an interative platform where all

stakeholders could exchange information and experience in access to finance for the SMEs

in order to invest in upgrading and new truck technologies.

A total of 114 participants from transport and logistics SMEs (30 in Thailand, 40 in Myanmar

and 44 in Vietnam, respectively) attended the workshops. In addition, the speakers and

representatives of financial institutions, namely K-Bank, and ASK Leasing Company,

Thailand; CB Bank, Myanmar, and Sacombank Leasing Company and TP Bank, Vietnam;

and trucking companies Hino, Scania, Thailand, MAN, Myanamr, and Hino, Viet Nam

presented their banking and leasing products and procedures, as well as trucking

technologies to freight transport and logistics companies.

To assist SMEs in developing business plans for investing in new and upgraded truck

technologies MI provided them business plan development guidance to facilitate the process

of access to finance. To this end, MI will continue to provide technical assistance to the

companies that are ready for investment in upgrading and new truck technologies from July

to October 31, 2018. As a matter of fact, 12 logistics SMEs, Myanmar, 03 companies, Viet

Nam, and 01 company, Cambodia have already informed GIZ and MI of their interest and

requested for technical assistance to business plan development from the project.

Logistics Association.

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TABLE OF CONTENT

ACKNOWLEDGEMENTS ...................................................................................................................... i

TABLE OF CONTENT .......................................................................................................................... iii

ABBREVIATIONS / ACRONYMS ........................................................................................................ iv

1. BACKGROUND ........................................................................................................................ 1

2. OBJECTIVES AND EXPECTED OUTPUTS ............................................................................. 3

2.1. OBJECTIVES ............................................................................................................... 3

2.2. ANTICIPATED OUTPUTS ............................................................................................ 3

3. EXPECTED OUTCOMES ......................................................................................................... 3

4. PARTICIPANTS ....................................................................................................................... 4

5. WORKSHOP INTRODUCTION ................................................................................................ 5

5.1. WELCOME REMARKS ................................................................................................ 5

5.2. WORKSHOP OVERVIEW ............................................................................................ 6

6. STUDY FINDINGS ................................................................................................................... 6

7. PRESENTATION OF FINANCIAL/LEASING PRODUCTS & SERVICES | TRUCK

TECHNOLOGIES ................................................................................................................................. 8

7.1. THAILAND ................................................................................................................... 8

7.2. MYANMAR ................................................................................................................. 11

7.3. VIETNAM .................................................................................................................... 16

8. DISCUSSIONS ....................................................................................................................... 18

8.1. THAILAND ................................................................................................................. 18

8.2. MYANMAR ................................................................................................................. 19

8.3. VIET NAM .................................................................................................................. 20

9. BUSINESS PLAN GUIDANCE ............................................................................................... 22

10. THE WAY FORWARD and CLOSING REMARKS ................................................................. 22

11. APPENDIX ............................................................................................................................. 24

11.1 CONCEPT NOTE ....................................................................................................... 24

11.2. PROGRAM ................................................................................................................. 27

11.3. COMPANIES LISTED FOR BUSINESS PLAN DEVELOPMENT ............................... 31

11.4. PHOTOS .................................................................................................................... 33

11.5. BUSINESS PLAN GUIDE ........................................................................................... 34

iv

ABBREVIATIONS / ACRONYMS

CB Bank Co-operative Bank Ltd

CGI Credit Guarantee Insurance

GIZ Deutsche Gesellschaft für Internationale Zusammenarbeit

GMS Greater Mekong Sub-region (GMS)

GMS-BF Greater Mekong Sub-region Business Forum

K-Bank Kasikornban Bank

MI Mekong Institute

MIFFA Myanmar International Freight Forwarders’ Association

Sacombank Sai Gon Thuong Tin Joint Stock Commercial Bank

SMEs Small and Medium Enterprises

TIFFA Thai International Freight Forwarders Association

TPBank Tien Phong Joint Stock Commercial Bank

VIFFA Vietnam International Freight Forwarders’ Association

WP Work Package

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1. BACKGROUND

The freight and logistics sector plays an important role in supporting economic development

in the Greater Mekong Sub-region (GMS). In realization of the importance of road transport

and sustainability of the transport and logistics sector, the project on “Green Freight

Transport and Logistics in the Mekong Region” is established with support from European

Union (EU), and jointly implemented by (i) Deutsche Gesellschaft für Internationale

Zusammenarbeit (GIZ); (ii) Mekong Institute (MI); and Greater Mekong Subregion Business

Forum.

The project objective aims to increase sustainable freight transport and logistics in the

Mekong Region with the specific objectives as follows:

I. To improve fuel-efficiency by better management, cooperation, and driving behaviors

in the Mekong region.

II. To improve the safety of dangerous goods transport within the Mekong region.

III. To increase access to finance for Small and Medium-Sized Enterprises (SMEs) in the

logistics sector in greening and freight and logistics.

IV. To promote modal shift, labelling, and other sustainable consumption and production

(SCP) incentive measures in freight, transport and logistics.

To achieve the project objectives, the intervention has focused on four core areas as below:

CORE AREAS BY WORK

PACKAGE (WP)

TARGETS

WP1. Fuel efficiency Implement measures to increase fuel efficiency to 500 micro

and small freight and logistics companies

WP2. Safety of dangerous goods

transport

Introduce guidelines for dangerous goods transport to

administrative bodies and companies. Facilitate cross-border

agreements and train on safety of dangerous good transport

WP3. Access to Finance Support green loan initiatives and develop investment plans for

work program

WP4. Awareness & Policy

Actions

Support awareness and policy actions, e.g. labelling,

regulations, incentives, modal shift.

In consideration of the SMEs’ financial situation with barriers to sources of credit and finance

in freight transport and logistics sector in the Mekong countries, such as Cambodia, Lao

PDR, Myanmar, and Viet Nam (CLMV), caused by high interest rates and collateral

requirements; lack of appropriate financial and leasing services, e.g. vehicle loans and

lease, limited cash flow for investment, low creditworthiness, this WP3 on “Access to

Finance” aims to provide freight transport and logistics SMEs with more information on (i)

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banking and leasing services, (ii) new and upgrading trucking technologies, and (iii) technical

assistance in preparation and development for SMEs’ access to more suitable sources of

credit and finance.

To that end, the WP3 with a strong linkage with WP1 (Improving Fuel Efficiency (Eco &

Defensive Driving, Financial Management, and Logistics Alliance) focuses on the overall and

specific objectives and main activities, which are summarized as below:

I. Overall objective: To increase access to finance for SME in the freight and logistics

sector.

II. Specific objectives:

a. To facilitate the process of access to loan and leasing services for freight transport

and logistics operators in CLMV countries; and

b. To implement technology and fleet upgrades in the selected companies, i.e. 10

SMEs in each country (Myanmar, Thailand, and Viet Nam).

III. Main activities.

a. Conduct study on banking and leasing services, including review of existing banking

services available in the selected countries: Myanmar, Thailand, and Viet Nam

b. Conduct stakeholder consultation workshops in each studied country to discuss

possible solutions on Access to Finance in support of technology improvement in

freight transport and logistics sector.

c. Provide technical assistance to the selected SMEs to develop business or investment

plans for technology improvement.

Upon completion of the study and technical consultation the financial institutions, truck

technology supplier and manufacturers, and associated stakeholders in the three countries,

Mekong Institute (MI) in cooperation with GIZ in Bangkok, Thailand conduct three

dissemination workshops on “Access to Finance” to provide the freight transport and

logistics SMEs with information on financial and leasing services of the financial institutions

and leasing companies in the three countries. The workshop also updated the SMEs on new

trucking technology and best practices.

The three dissemination workshops covered (i) one-day workshop in Thailand; (ii) one-day

workshop in Myanmar, and (iii) one day workshop in Viet Nam, taken place in June and July

2018, respectively.

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2. OBJECTIVES AND EXPECTED OUTPUTS

2.1. OBJECTIVES

The objectives of the dissemination workshop are to:

Provide the SMEs as the project beneficiaries with banking and leasing products and

services. financing freight transport and logistics business operations in Myanmar,

Thailand, and Viet Nam

Provide the SMEs as the project beneficiaries with new and upgrading trucking

technologies and best practices to enhance the efficiency of trucking and logistics

operations in Myanmar, Thailand, and Viet Nam.

Identify the gaps between financial and leasing supply and demand sides, i.e.

financial institutions and leasing companies and freight transport and logistics SMEs.

Offer an interactive platform for all policy, financial and technical matters to be

effectively discussed between and among the project stakeholders and beneficiaries.

2.2. ANTICIPATED OUTPUTS

The expected outputs of the dissemination workshop include:

Defined and recognized financial and leasing product and services available and

suitable for financing SMEs in freight transport and logistics operations and

development in each country, Myanmar, Thailand, and Viet Nam.

Defined and recognized technical solutions and best practices for developing trucking

technologies which are available and suitable for SMEs in freight transport and

logistics operations and development in each country, Myanmar, Thailand, and Viet

Nam.

Identified SME’ willingness and readiness to adopt new and upgrading trucking

technologies for providing technical assistance to investment / business plans

3. EXPECTED OUTCOMES

The Workshop aimed to achieve the following outcomes:

Financial and leasing products and services applied by SMEs in freight transport and

logistics operations and development in each country, Myanmar, Thailand, and Viet

Nam.

Technical solutions and best practices invested by SMEs in freight transport and

logistics operations and development in each country, Myanmar, Thailand, and Viet

Nam.

4

The identified SMEs received necessary technical assistance like development of

business/investment plan for their further action taken to access to finance and green

freight technologies.

4. PARTICIPANTS

Three national dissemination workshops in Thailand, Myanmar and Vietnam were attended

by 114 participants from logistics SMEs and 9 speakers from invited financial institutions and

trucking companies. In Thailand, 30 logistics SME participants and 4 speakers from K-Bank,

ASK leasing company, Hino and Scania trucking companies attended the workshop Rayong.

In Myanmar, 40 participants representing transport and logistics SMEs and 3 speakers from

CB Bank and MAN trucking company attended the workshop in Yangon. In Viet Nam, 44

participants from Vietnamese logistics SMEs and 3 speakers from Sacombank Leasing

Company, TP Bank and Hino Company participated in the workshop in Ho Chi Minh City.

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5. WORKSHOP INTRODUCTION

5.1. WELCOME REMARKS

On behalf of GIZ, Mr. Friedel Schlleier,

Deputy Project Director; and Ms.

Charurin Pholhinkong, Project

Coordinator, attended the workshops

and made the welcome remarks. They

expressed their delightful welcome and

thanks to all SME participants and

speakers, TIFFA, MIFFA, and VIFFA

for valuable collaboration and

contributions to the success of the workshops as well as continued supports to the project.

The GIZ representatives also made an introduction of the project objectives, work packages

(WPs) and activities with a focus on technical assistance and capacity building for the project

beneficiaries, i.e. transport and logistics SMEs, and stakeholders on sustainable measures

to increased fuel efficiency, eco-driving and transport. As a result, over 400 logistics

companies from CMLV have received Eco Driving trainings that aimed to help the

companies and drivers familiarize with good practices in driving for saving fuel costs by 10-

15%. It was also recommended that logistics companies need to upgrade their fleets with

use of fuel efficient technologies. To facilitate the process of access to finance for SME to

invest in upgrading and new truck technology, the project implemented the WP 3 – Access to

Finance whose objectives are to identify banking and leasing products and services, and

truck technologies that suit the needs of SMEs. On behalf of the project, the GIZ

representatives encouraged all participants to make best use of the workshops as a platform

for business discussion and networking with financial institutions and truck technology

companies and participating to result in business cooperation and utilize the technical

support of MI in business plan preparation and development in the next steps.

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5.2. WORKSHOP OVERVIEW

Mr. Madhurjya Kumar Dutta, Director of Trade

and Investment Facilitation Department (TIF),

Mekong Institute (MI), and Mr. Sa-nga

Sattanun, Program Manager, TIF, introduced MI

as a project partner, co-implementing the

project in collaboration with GIZ as of 2016, and

highlighted the workshop objectives and its

agenda in each country. The MI representatives

also presented the WP3 – Access to Finance,

and the implementation of the study on “Access

to Finance”, comprising desk study and the

consultation process with financial institutions, leasing companies, and truck companies in

Thailand, Myanmar, and Viet Nam that accomplished by mid-June 2018. The workshops

aimed to disseminate the study findings, including the financial and leasing products and

services; truck technologies to SMEs as the project beneficiaries. In addition, the project

made an effort to set a platform at the workshop where SMEs could meet with several

financial and truck technology providers to discuss possible solutions to access to finance for

investing in upgrading and new truck technologies. To this end, the MI representatives

suggested that both SMEs and financial institutions, leasing companies, truck technology

companies share business and investment ideas, and can form business cooperation after

the workshops. MI will continue to provide technical assistance to business plan

development to SMEs that are interested in developing business plans to call for investment

in upgrading and new truck technologies. Eventually, the MI representatives extended their

warm thanks to all participants and wished the workshops successes.

6. STUDY FINDINGS

Mr. Quan Anh Nguyen, Program

Specialist, Trade and Investment

Facilitation Department (TIF), Mekong

Institute (MI) shared the key findings of

the study on “access to finance”. As

such, Specifically, the presentation

covered (i) concept of green finance, (ii)

its typology and demand for investment

in green finance with a focus on

Mekong region; (iii) financial and

leasing products and services in the market; and (iv) challenges facing SMEs in access to

finance in Thailand, Myanmar, and Viet Nam.

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The key findings are summarized as follows:

Green loan program in support of freight transport and logistics sector is not existing

Banking products and services: green financing products and services for transport

and logistics are not being specially offered by the commercial banks. Interest rates

and duration of the SME loans vary from one commercial bank to another.

Leasing products and services cover: finance lease, operating lease, sale and lease

back, and hire purchase are prevailing products and services offered by leasing

companies. In case of Myanmar, leasing companies are not well-diversified in terms

of services provided to customers as compared to those in Thailand and Vietnam. It

is also noted that hire purchase is mostly offered to SMEs to invest in trucks for

transport services in Myanmar. Interests, requirements and terms and conditions,

and duration of leasing products are not attractive to SMEs.

Inadequacy of legal framework on green freight transport and logistics operations

and development;

Transport and logistics infrastructure congestion and inadequacy;

Resulting asset preference may deleverage the availability of funding for SMEs: (i)

financial institutions may encourage finance to large firms with good ratings rather

than unrated SMEs to reduce total high-risk assets; (ii) financial institutions may be

willing to hold “easy-to-sell assets” or high quality liquid assets, resulting in

constraining the provision of long-term credit; and (iii) collateral-based lending as a

majority.

Lack of diversified financing tools, such as non-bank financing from microfinance

institutions, finance companies, leasing, and venture capital investments.

Awareness and willingness of SMEs of improving environment performance

Inadequacy of SME finance policies, especially for green freight transport and

logistics operations in terms of:

- Public credit guarantee scheme;

- Lending to Micro, Small and Medium-Sized Enterprises (MSMEs);

- Interest rate subsidy;

- Soft loans;

- MFI development programs; and

- Equity market development for SMEs.

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7. PRESENTATION OF FINANCIAL/LEASING PRODUCTS & SERVICES

| TRUCK TECHNOLOGIES

7.1. THAILAND

Mr. Prasarn Ngarm-Phakphum,

Kasikorn Bank, on behalf of K Bank,

introduced auto finance products

offered by K-Bank, including:

Hire purchase (New car)

Hire purchase (Used car)

Refinance

Financial Lease

Hire purchase of K Bank has unique features and can be applied for new vehicles and used

vehicles. The asset purchased by K Bank’s hire purchase can be transferable to new

borrowers. Customers will be provided with the list of authorized dealers country-wide and

can apply for hire purchase either online or K Leasing service centers.

Low interest loan and comfortable installments;

Flat interest rate (a specified fixed interest rate that does not vary with the costs of

respective financial institution, thus remains intact throughout the loan term, or within

a specified period, e.g. 7 percent for 4 years’); and transfer of the ownership once

installments are completed;

Down payment scheme suits customers’ need and financial capacity;

Installment payment period: 06 years; and

No penalty fee for early loan settlements but 50% discount on interest

Refinance of K Bank offers an effective interest rate loan that will not affect much income of

borrowers. With effective interest rates, customers can determine their financial plans given

no risk of rising interest rates resulting in higher costs in the future. It is characterized with

following features:

Easy Installments, starting at 57 baht/day;

Installment terms up to 72 months;

Financing the vehicle subject to appraised values with effective or flat rate applied;

Maximum car age: 17 years

Business standard – quick loan application processing time, e.g. 01 day; and

Quick disbursement

Finance lease is offered to corporate customers with a fixed effective interest rate throughout

the contract term. It has unique features, such as, 0-30% for the deposit payment, up to six

years for loan duration depending on vehicle type and customer creditworthiness, and tax

deductible. For finance lease contract, the company can deduct the rental installment

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payments up to 36,000 baht a month as expenses. With finance lease, customers can

purchase 7-seat passenger vehicles and all types of commercial vehicles. For all

requirements of K-Bank’s products and services, the representative suggested that the

participants refer to its homepage: https://www.kasikornleasing.com/en/Pages/index.aspx

Mr. Anak Vijitpichiankul, Asia

Sermkij Leasing Public Co., LTD.

(ASK), introduced ASK’s key

products which are relevant to

SMEs’ need, and listed as below:

Hire purchase (for vehicle)

Refinance

Sale and hire purchase back

Finance lease

The company offers hire purchase, mainly to individual customers, for both new and used

automobiles, including passenger and commercial vehicles. The company’s major

customers are in Bangkok and metropolitan areas, followed by customers in the Central and

Northeast regions. The company is one of the founders of Thai Hire Purchase Association,

and its Management is the director of the Association. The company is a member of the

National Credit Bureau Co., Ltd.

Hire purchase can be applied for various vehicle brands, such as, Isuzu, Toyota, Mitsubishi,

Nissan, Audi and Mercedes-Benz, and etc. As mentioned, Hire purchase favors individual

customers who must meet the eligibility conditions required by the company.

As for sales and hire purchase back from the company, customers can apply for loan. This

product is more suitable for car owners who need cash flows and financial liquidity for new

investment.

The representative summarized the advantages of the hire purchase/leasing of ASK

company:

An alternative capital source to preserve the existing capital for other uses;

Investment can be extended subject to market demand;

Low interest rate risks thanks to fixed interest rate;

Use of other assets as guaranteed assets in exchange for capital (sale & lease

back);

Customers’ high cash flows and financial liquidity; and

Flexible repayment scheme consistency with customers’ cash flow

10

Mr. Pasakorn Sutthaphan,

Hino Motor Sales Thailand

Co., Ltd introduced different

models of Hino trucks to the

logistics SMEs, e.g. Hino truck

technology that supports green

initiatives and enhancement of

fuel efficiency for Hino truck

users. Especially, Mr.

Pasakorn depicted the models that are available in Thai market: (i) Hino 700 Splendor, (ii)

Hino 500 Victor, and (iii) Hino FC 500 Dominator.

Hino 700 Splendor is a special model with powerful engine which is environmentally friendly.

It is the biggest number with 480-horse power, in mixed sense of European nobleness and

Japanese charms. Its common-rail diesel engine is durable, powerful and fuel saving and

follows Euro III standard for low carbon emission. It designs for fuel economy, and long-

distance and heavy drive. ZF semi-automatic transmission helps truck and engine boost

truck performance and durability with a computerized system. In addition, Mr. Pasakorn also

explained about other parts of Hino 700 Splendor, such as cruise control system, engine

retarder, radial tubeless tire and GPS iQ-San. HMST is the distrinutor of Hino 700 Splendor

in Thailand. The specifications, performance, exteriors and interiors, and demonstration of

Hino driving were also illustrated.

Mr. Pasakorn Sutthaphan shared information of Hino dealers across Thailand with logistics

SMEs. A program used to search easily information of dealers and Hino service centers was

introduced to participants during the workshop. Logistics SMEs should communicate with

Hino service centers and dealers to get more information about financial and non-financial

services.

Ms. Phuriwat Rak-Intr, Retail Operations

Director, Scania Siam Co., Ltd shared the

details of Scania works and services in

Thailand. Scania Siam Co., Ltd is the only

company of Scania in Thailand to

enhance Scania’s partnership solutions to

sustainable profit growth in the region.

Scania products are designed based on

industry-specific applications and tailored-

needs of business. He also stressed that Scania’s solutions are concerned with global

environmental challenges in terms of smart and safe transport, energy efficiency and

alternative fuel and electrification.

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Mr. Phuriwat Rak-Intr introduced to logistics SMEs about 16-litre V8 Marine engine, and

Scania 13- and 9-litre inline engines. Marine engines offer new opportunities to enhance

efficiency, operating economy, and environmental performance. Also, Scania truck models,

such asd P series, G series, and R series was also shared to participants during the

workshop. As for after-sales services, the company provides workshop services, connected

services, driver services, and finance and insurance services across Thailand as well as in

the region.

Mr. Phuriwat Rak-Intr invited truck driver to participate in Scania driver competitions,

especially for truck drivers and bus drivers. This activity aims to enhance knowledge of

drivers on Eco-driving and their fuel-saving behaviors. The fact is that drivers take an

important role to improve transportation efficiency, reduce pollution, and improve road

safety. After the workshop, the SMEs and chance to exchange business information and

discusion as business networking with Scania staff memebers.

7.2. MYANMAR

Mr. Sai Naw, Line Management Associates,

CB Bank introduced logistics companies to

SME loan products and services. There are

four types of SME loans available for

Myanmar logistics SMEs that are presented

in Table 1. The CB Bank discussed how the

CB bank assesses creditworthiness of SME

borrowers. The assessment is based on

following key facts:

SME’s experiences in business operations and development;

Purpose of the borrowings;

Financial needs and request for bank loan;

Use of bank loan, e.g. business operations and expansion;

Business plan;

Repayment plan and schedule; and

Assets as collateral to prevent the bank from loan defaults

Logistics companies were suggested to review their business status against the following

conditions before applying SME loan from the CB Bank:

Market of the business: competition in market, products or services of the business;

Purpose of the business: Future plan of business, goals of profit and sales, cost

reduction plan;

Assets: capacity of employees and quality of business assets;

Mr. Sai Naw Line, Management Associates

12

Financial capacity: Financial record and cash flow management

Business administration and capacity: managerial capacity, experiences and capacity

of managers

Table 1: Types of SME loan products and services SME Loan Type SME CGI Loan

(Collateral- Free

Loan)

SME CB- KfW

Loan ( Fixed

Asset Financing

Loan)

SME JICA TSL

(Long term

Investment Loan)

SME Term Loan

(Working Capital

Loan)

Interest rate 13% p.a. 8.5% - 13% p.a. 8.5% p.a. 13% p.a.

Repayment period 1 Year 1-5 years 1-5 years 1 Year

Maximum loan

amount

20 Million MMK 100 Million MMK 500 Million MMK 650 Million MMK

Minimum years of

business operation

2 years up to 3 years 2 years 2 years

Collateral the Credit

Guarantee

Insurance (CGI)

from Myanmar

Insurance

Mobile assets:

machine, vehicle,

Fixed deposit

Fixed assets:

Land or building

Fixed assets:

Land or building

Fixed assets:

Land or building

Interest Payment Monthly Monthly Monthly Monthly

Principal

Repayment

3 or 6 monthly Monthly

Installment

Yearly 3 or 6 monthly

The representative also provided the information on SME centers of CB Bank, which

illustrated in Table 2.

Table 2: Address and Contact of SME Centers of CB Bank

SME Centers Address and Contact

Yangon (SME Center 1) No.(30),Corner of Thiri Mon Road and Thiri Mon Plaza(7) Street,

Thiri Mon Housing, Mayangone Township, Yangon, Myanmar,

Telephone : (95-13) 682751

Mandalay (SME Center 2) No.(275),33 Street, Between 84 x 85 Street, Cnan Aye Thar Zan,

Mandalay, Myanmar.

Telephone : 02-4039363,02-4065541

Yangon (SME Center 3) No. (3),Pyihtaungsu Main Road, South Dangon, Yangon, Myanmar.

Telephone : 01-8100859,01-8100860

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Ms. Khin Nilar Aung, Assistant General

Manager CB Bank presented CB Bank’s hire

purchase that offers for both new and used

vehicles requested by individual and corporate

customers. Table 3 shows features of CB hire

purchase in terms of calculation type, interest

rate, duration, service charges, repayment

schedule.

Table 3: Features of CB Hire Purchase

Type of Hire Purchase HP for new car HP for used car

Calculation Amortization Flat

Down payment 30% 30%

Interest rate 13% 9%

Duration 5 years 2 years

Service charges 1 year = 1 %

2 years = 2%

3 years = 3%

1 years = 1%

2 years = 2%

Stop payment Nil Payment (10%) for some dealers

Initial payment Down payment and service fees Down payment and service fees

HP application for individual customer requires the documents as specified in Table 4.

Table 4: Required Documents for CB Hire Purchase

Required Legal Documents Source of income

HP Documents

Complete application

form

A recent photo of

applicant

NRC, Household

registration (Copy)

A letter from a council

to verify address

(within three months, in

remark for bank

matters)

Testimonial from

district police station

within three months

If an individual employee,

evidence of income and

employment status from

HR & associated

departments

Three consecutive

months pay slip)

Sales & Purchase agreement

(Need to submit original doc when

making a contract at branch after

bank’s approval

Sales Invoice (same process as

“sales & Purchase agreement to

submit original documents)

Photos of the car (seven photos of

the car-back, front, two sides,

engine, inside, chassis)

Car owner book (same process as

“sales & purchase agreement to

submit original book)

Car insurance (same process as

Deputy

14

Required Legal Documents Source of income

HP Documents

“sales & purchase agreement to

submit original

(insurance through CB agent-CB )

If individual customers apply for hire purchase products and services to invest in transport

business operations, additional documents are required:

Recent company license (copied)

Photos of business

Tax payment slip, if any (copied)

Financial statements, e.g. previous 2 years

Bank statements, for six months at minimum

HP application for corporate customer requires the documents as specified in Table 5.

Required Legal Documents Source of Income HP Documents

Complete application form

A recent photo of applicant

NRC, household

A letter from a council to

verify address minutes of

board of directors (within

three months in remark for

bank matters)

Testimonial from district

police station within three

months.

Meeting minutes of board

of directors to use CB bank

hire purchase

Recent Company License

(Copy)

Photos of business

Bank statement (at least

six months)

Tax payment slip-if have

(Copy)

Recent financial

statement-at least two

years

Forms E, 6, 26, MOA &

AOA

Sales & Purchase agreement

(Need to submit original doc

when making a contract at branch

after bank’s approval

Sales Invoice (same process as

“Sales & Purchase Agreement to

submit original documents)

Photos of the car (seven photos

of the car-back, front, two sides,

engine, inside, chassis)

Car owner book (same process

as “sales & purchase agreement

to submit original book)

Car insurance (same process as

“sales & purchase agreement to

submit original (insurance

through CB agent-CB)

Applicants of CB Bank hire purchase need only one guarantor who needs to prepare the

same documents required for the applicants.

Ms. Khin Nilar Aung shared the list of authorized dealers of the bank with the SMEs and

continued to discuss the application process of the CB Bank’s hire purchase as illustrated in

the following chart.

15

Once the customer receives Bank’s approval letter, s/he can proceed with contract signing

and down payment.

Mr. Tan Hwee Hua, Technical Trainer,

ST Engineering Land System, MAN

Trucks & Bus Singapore, presented the

main products, such as trucks, bus and

coach, special vehicles having different

models and functions. Based on the

weight of truck, MAN trucks are

classified as light and medium trucks (7-

26 tons) and heavy truck (18-42 tons).

Trucks and truck-related costs occupy

high percentage in the cost structure of the SMEs’ transport and logistics business. Truck

technologies can certainly help SMEs enhance reduction of truck-related costs, and

business development toward sustainability. In this respect, Mr. Tan Hwee Hua introduced

truck eco-technologies, safety technologies, trucking management technologies and drivers’

training technologies to the participants. Technically, MAN installs fuel and cost-efficient

technologies into its trucks and vehicles, such as, fuel-efficient trucks and vehicles under

MAN fuel efficiency program. As for eco-technologies, the program builds in MAN engine

system, MAN lightweight design and rolling resistance, and MAN aerodynamic equipment.

MAN engines use common rail engine system with wide range of power output (150-680 hp),

low emission and better turbo and heat management. Lighter designs in chassis, engine and

gearbox boost power output and load capacity of truck with minimum fuel consumption. MAN

tires can reduce in rolling resistance by 3%, and save fuel consumption by 1%. With

appropriate road conditions and vehicle speed, MAN aerodynamics ensures an average fuel

saving by 15-25%.

For transport safety, the representative introduced the company’s safety and assistance

system, comprising (i) safety system, (ii) Easy-Start, (iii) MAN ACC-Active Cruise Control,

and (iv) MAN land guard system. Electronic stability programs (ESP) of MAN trucks can

diminish truck accidence by 40%. In fact, poor operation management is one of factors that

leads to high maintenance cost and shorter service intervals. MAN Company usually

provides its customers with technical assistance and training on maximizing truck

productivity, minimizing truck downtime, low maintenance cost and longer service intervals.

Go to Dealer show room & select a car, Pay initial deposit

Customers choose the bank, fill

application, submit required documets

Waiting for Bank response for application

16

Competitiveness and safety are becoming increasingly important to environmental protection

by truck operations, truck fleet managers and drivers. In this connection, truck business

owners not only rely on technical vehicle innovations, but also skillful drivers with attitude

and behavior to eco-driving practices. Therefore, MAN company has provided training to

truck owners and drivers on driving technologies in order to help them maximize efficiency

and competitiveness.

7.3. VIETNAM

Mr. Pham Le Kien, Vice General Director of Sacombank Leasing Company (SLC) provided

an overview of leasing market in Viet Nam which was established in 1995. In particular,

finance lease is an optimal solution for medium and long term capital, i.e. credit, which helps

enterprises, especially small and medium-sized enterprises (SMEs), which could not access

to bank loans, or mobilize capital from the stock market, approach the opportunity to invest

in innovative technology. With finance lease, a leasing contract with 3-year, 5-year or 10-

year term contract is offered subject to the lessee’s capital need. SLC, an affiliate of Saigon

Thuong Tin Commercial Joint Stock Bank (Sacombank), was established in July 2006 with

the charter capital of VND 150 billion. At present, it capital increases to VND 300 billion, and

its total lease volume is approximately VND 2000 billion investing in transport vehicles,

machines and equipment, and so on.

As for SLC’s lease products and services, Mr. Pham Le Kien clarified that finance lease is

simple by nature, and it fully suits the needs of freight transport and logistics business

operations. In addition, SLC offers Sale and Lease Back services with which SLC can

purchases the asset owned by SMEs then leases such asset to them under finance lease

contract, so that SMEs can continue to use such asset for their business.

As for the annual interest, Sacombank Leasing Company (SLC) offers competitive interest

rate, which is 7% - 9% per annum, while midterm and longterm bank loan’s interest rate is at

10% and more. The company targets SMEs and cooperatives as the potential and prioritized

customers, especially for those that are newly established / start-up companies in need of

investment. As such, finance lease can meet the SMEs’ capital need and the

financed/leased asset can be used as collateral. While the finance lease is up 70% of the

asset value of average, SLC can consider a higer financing percentage, which is up 85% of

the asset value, on a case-by-case basis.

SLC comfirmed that the sources of fund for financing midterm and longterm lease is

available, i.e. not regulated by the State Bank as compared to bank loans offered by

commercial banks where the short-term/midterm and longterm loan ratio must be secured in

full comopliance with the banking and credit regulations.

17

Another advantage is preferential taxes applied to machine, equipment, and other asset that

cannot be manufactured in Viet Nam. Under the lease contract, lessees, e.g. SME

customers are entiled to this preferenial tax treatment.

As for finance lease procedure, SLC advised that it is similar to midterm and longterm loan

procedure. SLC will request the lesses to submit legal and associted documents in line with

SLC lease policises and regulations. The only difference is that the disbursement is in

principple made to the contracted asset company/supplier. Mr. Pham Le Kien suggested that

the participating SMEs directly contact SLC for questions on its lease products and services

during and after the workshop as a way for bothe side to build the business network and

copperation.

Mr. Tran Tien Ngan, Tien Phong Joint Stock Commercial Bank (TP Bank), Automobile

Trading Center, firstly introduced the Automobile Trading Center in Ho Chi Minh City

(HCMC), which was recently established in September 2017. For its business development

objective, HCMC center has formed three business offices in An Giang, Tay Ninh, and Vung

Tau provinces in order to provide products and services to its target customers, (i) individual,

and (ii) corporate customers, operating in transport and logistics, covering the market

segment from Khanh Hoa to the Mekong delta provinces.

As the participants are the SMEs, Mr. Tran Tien Ngan provided the information eligibility

condition for automobile financing, such as, active business operations with revenue

generated at least in a 6-month period, credit history without no outstanding debt (category

2) at time of loan application and no bad debt (categories 3-5) within the past 1 year, and

especially no outstanding debt at TP Bank.

There are three product lines financed by TP Bank: (i) new trucks holding American,

European, Japanese, Korean brands; (ii) trucks assembled in Viet Nam; (iii) newly imported

trucks from China and others. The loan value is from 55% - 75% of the asset value for a loan

term from 03 to 07 years, respectively. For bank loan application for procurement of 14-16

seat vans, TP Bank’s financing percentage van be up to 80%, while (ii) used and/or

specialized trucks can be financed with the financing percentage from 55% - 70% subject

the company’s business performance and financial situation.

TP Bank offers three options for interest rates per annum: (i) fixed rate of 7.6% in the first 06

months; or (ii) 8.2% in the first 06 months; or (iii) 8.9% in the first 12 months. After this, float

interest rate from 4.5% - 4.65% will be applied. The effective interest rate is from 12.0% -

12.5%. The interest rate applied to TP Bank’s customers is subject to its internal credit

evaluation. In this connection, Mr. Tran Tien Ngan explained that TP Bank requires its

customers to submit (i) legal documents; (ii) financial statements, and (iii) asset-related

documents for its internal credit evaluation and the associated bank loan processing

procedures.

with

18

Mr. Nghi, Hinor Motor Viet Nam, provided the workshop with (i) an introduction of Hino Motor

Viet Nam, (ii) Hino products, and (iii) after-sale services. Hino Motor Viet Nam was

established in 1996 with its capacity of assemling 700 vehicles per month. In Viet Nam, Hino

focuses on two product lines: (i) imported trucks, including trucks imported from Indonesia

are light weight truck of 7.5 to 8.25 tons, and trailer trucks imported from Japan and China;

and (ii) CDK trucks with full spare parts impoted from Japan (weight from 4.8 – 24 tons).

As for revenue, Hino representative informed that highest revneue equivaknegt to 7000

trucks was achieved in 2015.

Hino product specifications were introduced to the workshop, including EURO-4 diesel

engine, high capacity as compared to the previously manufactured engine, e.g. EURO 2

engine, and other functions as described in Hino borochure provided at the workshop.

Hino also offers its customers with one-year maintennace period without millage limit, eco-

driving trainings, and associated activties that mainly serve fuel efficiency, fuel cost saving,

and evironmental protection.

8. DISCUSSIONS

8.1. THAILAND

The SMEs discussed the following issues with the financial institutions. The issues reflect

current situation of SME financing in the country, which is summarized as below:

Most of financial products and services are based on collaterals;

SMEs do not have adequate banking information and advice from commercial banks;

Loan application process is still complex to SMEs;

High borrowing cost is one of the challenging issues for SMEs;

Non-flexibility requirements for bank loans with regard to business experiences,

collaterals, documentation, business plan, financial statements;

Funds provided through three funds, notably (i) ENCON Fund, (ii) ESCO Fund, and

(iii) Energy Efficiency Revolving Fund (EERF) in Thailand have yet to target green

logistics sector.

Higher interest rate is one of the factors are not attractive to SMEs.

As a matter of fact, limited access to finance for SMEs is one of key barriers to investment

and developing green logistics with use of truck technology. Green truck technologies in the

market that can help SMEs reduce fuel consumption and costs are not attractive to SMEs

because SMEs can also save fuel costs to an extent by using conventional technologies.

The SMEs reflected that only education and marketing on green technologies cannot

convince SMEs to go green without any green loan programs.

equivalent

19

8.2. MYANMAR

Following issues were discussed during the consultation session between CB Bank and

SMEs.

SMEs are currently not allowed to use their operating vehicles or vehicles as

collateral for bank loan.

Some bank loans are not enough to purchase branded trucks which might cost

around 500-800 million MMK.

Regarding hire purchase, 30% required for down payment is still high for some

SMEs.

SME borrowers discussed any possibility of loan in US dollar to avoid higher

percentage of bank service charges and bank interest rates. This is not allowed by

the Central Bank of Myanmar on foreign currency management law and regulations.

Some banks provide SMEs with bank loans merely for purchase of new

trucks/vehicles, while other banks like CB bank offer loans for purchasing used cars,

e.g. used cars before 2017 model and with any brands.

Registered SME members are required to follow applications for some loan types,

while not required for some other loans. For this reasons, the SMEs are unclear

whether or not they need to register every business type.

SMEs are commonly required to submit such documents as business license,

financial statement with net profit, photos of business operation and taxation

documents. The CB bank suggested that SME have to submit financial statements

with net profit.

CB bank also suggested that hire purchase be a best choice of financial products if

SME needs only to purchase vehicles. Hire purchase is normally simpler and easier

than other bank loans in terms of loan procedures and required documents.

The banks suggested SMEs to include business information which is prerequisite for

the bank and usually provide collaborative consultation service to SMEs.

Generally, SMEs can only access to limited amount of loans from the banks as

compared to large-sized companies. Some of reasons for such limits are related to

default rates of SMEs loans, collateral capacity of SMEs, no credit history system in

Myanmar.

The SMEs are also suggested to apply truck/vehicle insurance that will cover cost

related with accident or damage to operating trucks as the banks prefer new trucks

with full insurance scheme.

The representatives of MAN trucking company discussed the SMEs the key issues on gap

between new fuel efficient truck and technologies and existing truck models and technology

being used by the SMEs. The following issues and challenges facing the investment in new

trucks in business were discussed:

20

Many SMEs heavily rely on used trucks and low tech trucks. Market for new truck

technology is still limited in Myanmar in terms of numbers of customers, dealers,

distributors, and workshops for maintenance services. Investment in new truck

technology truck is more costly to SMEs given their small-scaled business

operations;

Since market for green freight technologies is relatively not competitive in Myanmar,

cost for spare parts and maintenance services is quite high to SMEs. For example;

SMEs find it easier to use cheaper spare parts if they use second-hand trucks and

many maintenance workshops are available;

High import duty imposed by the government cause the imported trucks to be more

pricy, leading high cost burden to SMEs;

The SMEs suggested that truck companies provide skilled truck technicians at truck

service centers; and these centers be available in all commercial towns.

Other issues, such as, poor road conditions, unsafe truck stations, unskillful drivers,

and so on cause an increase in transport and logistics business costs.

8.3. VIET NAM

The following issues were discussed:

- Availability of Green loan products and services to finance the development of

sustainable transport and logistics. Both TP Bank and SLC clarified that specific green

loan and lease schemes are not yet available. But it can be seen that several criteria

related to environmental protection are factored in banking and lease products, e.g.

minimum standards for financing importation of used vehicle.

- The most difficulties facing SMEs’ access to credit are (i) family-style business

administration, which is unprofessional; (ii) inaccurate financial reports/statements to

meet the bank’s requirements. For these reasons, SMEs are normally classified as high

risk customers, so that the interest rate for bank loans is higher that applied to large-

sized companies.

- Customer’s ownership and types of asset for finance lease. The leasing company will

transfer the asset ownership to the lessee once the debt is full paid, and finance lease is

only applied to machine, equipment, and mobile asset, i.e. vehicles, not for fixed asset

such as factory, warehouse or the like. The minimum value for finance lease is VND 100

million per asset. The lessee has the right buy the asset upon completion of finance

lease contract.

- One SME participant suggest that finance lease consider the financing for logistics

operations such as construction of warehouse, containers, and so on given the growing

need of logistics companies.

- The SMEs are also concerned about fiance lease with regard to additional costs incurred

to the lessee, e.g. vehicle issurance, lease term, i.e. 03 years, the ownership held by

lessor. Therefore, SMEs tend to use bank loan. In response, SLC clarified that the lease

21

term is now extended beyond a 3-year period. Regarding diversifcation of lease

products, SLC informed the workshop that its company wanted to widen the range of

lease products and services, but its operation must comply with the State Bank’s

regulations. However, SLC and Sacombank can provide its customer with a package (i)

fixed asset as factory financed by bank loan, and (ii) machine and equipment leased by

SLC, which is consered as a feasible and better solution to meet its customer’s demand.

- One SME participant raise an issue related to finance lease: (i) name of the vehicle

owner labelled and attached to the vehicle; (ii) SME’s disadvantage due to non-

ownership during the finance lease term. Particularly, SME as a lessee does not have

asset to evidence its finnacial capacity to compete with the others in case of bidding for

logistics business projects. In this regard, SME customers prefer bank loans to finance

lease. In addition, financing cash flow for logistics companies is a real need, while

commercial banks only finance SMEs’ subject to their collateral asset value.

- One SME participant shared his concern about how to help increase the comptetivess od

logistics companies in Viet Nam. In particular, it was noted that the project intervention,

including eco-driving traing, is helpful, but not sufficient. The SMEs need the

Government actions that can help improve the SMEs’ competitiveness. For instance, the

interest rate must be reduced to encourage SMEs’ invetsment in upgrading and new

technologies.

22

9. BUSINESS PLAN GUIDANCE

To assist the SMEs in developing business plans for investment in truck technologies,

including upgrading and new truck technology, and for access to finance, Mr. Quan Anh

Nguyen, Program Specialist, and Mr. Sa-nga Sattanun, Program Manager presented the

business plan development guidance that covers the following components:

Company and business overview that covers the information on the company’s legal

status; company products and services; current business performance and financial

status, i.e. current cash flows - total amount of cash received from sales monthly or

yearly; cash payment; and cash balance; Demand for financing; list of bank loan being

financed; number and total of loans; financiers; and business relationship with financial

institutions.

Market analysis focuses on market segmentation, target market segment strategy,

service business analysis, Industry trends, competition and buying patterns, business

participants, market strategy, pricing policies, sales strategy, and sales forecast)

Financial analysis covered Financial Analysis and Projection, i.e. financial plan, break-

even analysis, projected profit and loss, project cash flow, project balance sheet,

business and financial ratios.

Need of Financing in the form of debt financing, e.g. bank loan; equity financing, and/or

others, i.e. mixed debt and equity financing.

As scheduled, MI will provided the guidance with detailed steps in business plan

development and the work plan for both sides (MI and SMEs) to cooperate each other in

developing the SMEs’ business plans after the workshops.

No companies in Thailand are interested in developing business plans with the project

technical assistance through MI, while 12 companies in Myanmar, 01 company in Cambodia,

and 03 companies in Viet Nam have confirmed their interests and readiness in developing

business plans in collaboration with the project from July to October 2018.

10. THE WAY FORWARD and CLOSING REMARKS

Mr. Madhurjya Kumar Dutta, Director, TIF, Mekong Institute (MI); and GIZ representatives

summarized key outputs of the workshop, and expressed the way forward for the project

activities upon completion of the workshops in the three countries. The GIZ and MI

representatives stressed that the project beneficiaries, SMEs with their consideration for

participation and investment in “sustainable freight transport and logistics” for the purpose of

fuel efficiency in logistics and transport sector would be significantly contribute to

sustainability through environmental protection. In this connection, investment opportunities

and policy incentives in the context of ASEAN Economic Community (AEC) that are coming

23

in the near future, especially in Myanmar, Thailand and Vietnam, will pave a way for

sustainable transport and logistics development.

In summary, further technical assistances will be open to SMEs for business plan

development. Interested SMEs will be contacted by the project team for a further preparation

and arrangements in this connection. The assistance is not only to serve the process of

access to finance, but also to help the companies better understand business perspectives

in a sustainable manner. Finally, the GIZ and MI representatives extended their warm thanks

to all SMEs and speakers for active participation and contributions to the workshops’

successes; and the project team looked forward to the SMEs’ continued cooperation in

business plan development and other associated project activities from this point of time till

the project completion.

24

11. APPENDIX

11.1 CONCEPT NOTE

I. INTRODUCTION

The freight and logistics sector plays an important role in supporting economic development

in the Greater Mekong Sub-region (GMS). In realization of the importance of road transport

and sustainability of the transport and logistics sector, the project on “Green Freight

Transport and Logistics in the Mekong Region” is established with support from European

Union (EU), and jointly implemented by (i) Deutsche Gesellschaft für Internationale

Zusammenarbeit (GIZ); (ii) Mekong Institute (MI); and Greater Mekong Subregion Business

Forum.

The project objective aims to increase sustainable freight transport and logistics in the

Mekong Region with the specific objectives as follows:

i. To improve fuel-efficiency by better management, cooperation, and driving behaviors

in the Mekong region.

ii. To improve the safety of dangerous goods transport within the Mekong region.

iii. To increase access to finance for Small and Medium-Sized Enterprises (SMEs) in the

logistics sector in greening and freight and logistics.

iv. To promote modal shift, labelling, and other sustainable consumption and production

(SCP) incentive measures in freight, transport and logistics.

To achieve the project objectives, the intervention has focused on four core areas as below:

CORE AREAS BY WORK

PACKAGE (WP)

TARGETS

WP1. Fuel efficiency Implement measures to increase fuel efficiency to 500 micro and

small freight and logistics companies

WP2. Safety of dangerous goods

transport

Introduce guidelines for dangerous goods transport to

administrative bodies and companies. Facilitate cross-border

agreements and train on safety of dangerous good transport

WP3. Access to Finance Support green loan initiatives and develop investment plans for

work program

WP4. Awareness & Policy

Actions

Support awareness and policy actions, e.g. labelling, regulations,

incentives, modal shift.

In consideration of the SMEs’ financial situation with barriers to sources of credit and finance

in freight transport and logistics sector in the Mekong countries, sucha as Cambodia, Lao

PDR, Myanmar, and Viet Nam (CLMV), caused by high interest rates and collateral

requirements; lack of appropriate financial and leasing services, e.g. vehicle loans and

lease, limited cash flow for investment, low creditworthiness, this WP3 on “Access to

Finance” aims to provide freight transport and logistics SMEs with more information on (i)

25

bankning and leasing services, (ii) new and upgrading trucking technologies, and (iii)

technical assistance in preparation and development for SMEs’ access to more suitable

sources of crtedit and finance.

To that end, the WP3 with a strong linkage with WP1 (Improving Fuel Efficiency (Eco &

Defensive Driving, Financial Management, and Logistics Alliance) focuses on the overall and

specific objectives and main activities, which are summarized as below:

i. Overall objective. To increase access to finance for SME in the freight and logistics

sector.

ii. Specific objectives.

a. To facilitate the processs of access to loan and leasing servides for for

freightt transport and logistics operators in CLMV countries; and

b. To implement technology and fleet upgrades in the selected companies, i.e.

10 SMEs in each country (Myanmar, Thailand, and Viet Nam)

iii. Main activities.

a. Conduct study on banking and leasing services, including review of existing

banking services available in the selected countries: Myanmar, Thailand, and

Viet Nam

b. Conduct stakeholder consultation workshops in each studied country to

discuss possible solutions on Access to Finance in support of technology

improvement in freight transport and logistics sector.

c. Provide technical assistance to the selected SMEs to develop business or

investment plans for technology improvement.

Upon completion of the study and technical consultation the finnacial institutions, technology

supplier (manufacturers), and asocaited stakeholders in the three countries, Mekong

Institute (MI) in cooperation with GIZ in Bangkok, Thailand is going to conduct a

dissemination workshop on “Access to Finance” to provide the freight transport and logistics

SMEs with inofrmation on finacial and leasing services of the financial institutions and

leasing companies in the three countries. The workshop will also update the SMEs on new

trucking technology and best practicies.

There are three disssemination workshops, covering (i) one-day workshop in Thailand; (ii)

one-day workshop in Myanmar, and (iii) one day workshop in Viet Nam taken place in June

and July 2018, respectively.

II. OBJECTIVES AND ANTICIPATED OUTPUTS

2.1. Objectives

The objectives of the dissemination workshop are to:

- Provide the SMEs as the project beneficiaries with banking and leasing products and

services. financing freight transport and logistics business operations in Myanmar,

Thailand, and Viet Nam

26

- Provide the SMEs as the project beneficiaries with new and upgrading trucking

technologies and best practices to enanhace the efficiency of trucking and logistics

operations in Myanmar, Thailand, and Viet Nam.

- Identify the gaps between financial and leasing supply and demand sides, i.e.

financial institutions and leasing companies and freight transport and logistics SMEs.

- Offer an interactive platform for all policy, financial and technical matters to be

effectively discussed bettween and among the project stakeholders and

benefiviacies.

2.2. Anticipated Outputs

The expected outputs of the dissemination workshop include:

- Defined and recognized financial and leasing product and services available and

suitable for financing SMEs in freight transport and logistics operations and

development in each country, Myanmar, Thailand, and Viet Nam.

- Defined and recognized technical solutions and best practices for developing trucking

techologies which are available and suitable for SMEs in freight transport and

logistics operations and development in each country, Myanmar, Thailand, and Viet

Nam.

- Identified SME’ willingness and readiness to adopt new and upgrading trucking

technologies for providing technical assistance to investment / business plans

III. TARGET PARTICIPANTS

The dissemination workshop is expected to be attended by (i) 20 freight transport and

logistics SMEs in each country (Myanmar, Thailand, and Viet Nam; (ii) selected financial

institions and leasing companies; (iii) trucking and vehical companies and manufactuers; and

(iv) trucking and logistics associations from the three countries. For this purpose, an

expected total of 20 – 30 delegates will be invited to each dissemination workshop in each

country.

IV. TIME AND VENUE

The dissemination workshop will be held at (i) Yangon, Myanmar, (ii) Bangkok/Rayong,

Thailand, and (iii) Ho Chi Minh City, Viet Nam from June – July 2017.

V. WORKSHOP AGENDA AND PROGRAM

The dissemination workshops will be set in the form of expert-led topic presentations

together with group discussions. To this end, the technical experts from financial institutions

and leasing companies; trucking and vehicle companies and manufacturters are to provide

guidance on technical assistance and instructions, while GIZ and MI’s staff members are to

facilitate all discussions of the delegates. Overall, GIZ and MI are responsible for keeping

the woekshop processes on track and achieving its objectives as per the following agenda

and schedule:

27

11.2. PROGRAM

Rayong, Thailand

Tuesday, June 26, 2018

Time Activities and key topics Speaker | Presenter

8:00 – 8:30

Registration

8:30 – 8:40 Welcome Remarks

Mr. Sehlleier Friedel, Deputy

Project Director, GIZ

8:40 – 9:50 Workshop Overview

Workshop Objectives

Expected workshop output and outcomes

Workshop agenda

Mr. Sa-nga Sattanun, Mekong

Institute (MI)

9:50-10:00 Introduction All participants

10:10-10:20 Group photo and Coffee / tea break

All participants

All participants

10:20 -10.50 Session 1: Study findings on Financial Products and

Sevices

Overview of Green SME Finance Initiatives in

the Mekong Countries

Key findings and recommendations

Mr. Quan Anh Nguyen Mekong

Institute (MI)

Translated by Mr. Sa-nga,

Mekong Institute

10:50 – 11:15 Session 2: Financial and Leasing Products and

Service

Types of financial products and services

Financial institutions’ loan policies and

procedures

Target borrowers

Others

Financial Institutions:

Mr. Anak Vijitpichiankul, Asia

Sermkij Leasing

11:15 – 12:00 Session 3: Financial and Leasing Products and

Service

Types of financial products and services

Financial institutions’ loan policies and

procedures

Target borrowers

Others

Financial Institutions:

Mr. Prasarn Ngarm-Phakphum,

Kasikorn Bank

12:00 – 13:00 Lunch

28

13:00 – 14:00 Session 4: New and Trucking/Logistics Techonogies

Radial Tire to reduce tyre pressure

Driver training techonogies

Trucking eco-technologies

Trucking safety technologies

Trucking management technolgies

Others

Mr. Pasakorn Sutthaphan,

Hino Motor Sales Thailand Co.,

Ltd

14:00 – 15:00 Session 4: New and Trucking/Logistics Techonogies

Radial Tire to reduce tyre pressure

Driver training techonogies

Trucking eco-technologies

Trucking safety technologies

Trucking management technolgies

Others

Ms. Phuriwat Rak-Intr, Retail

Operations Director

Scania Siam Co., Ltd.

15:00 – 15:10 Way Forward and Closing Remarks Mr. Sehlleier Friedel, Deputy

Project Director, GIZ

15:10-15:30 Coffee break and Business Networking All participants

Yangon, Myanmar

Thursday, June 28, 2018

Time Activities and key topics Speaker | Presenter

8:00 – 8:30

Registration

8:30 – 8:40 Welcome Remarks

Ms. Charurin Pholhinkong,

GIZ

8:40 – 9:00 Workshop Overview

Workshop Objectives

Expected workshop output and outcomes

Workshop agenda

Mr. Madhurjya Kumar Dutta

Mekong Institute (MI)

9:00 – 9:30 Session 1: Study findings on Financial Products and

Sevices

Overview of Green SME Finance Initiatives in

the Mekong Countries

Key findings and recommendations

Mr. Quan Ahn Nguyen,

Program Specialist, Mekong

Institute (MI)

9:30-10:00 Group photo and Coffee / tea break

All participants

29

10:30 – 11:20 Session 2: Financial and Leasing Products and

Service

Types of financial products and services:

Hire purchase and SME loans

Financial institutions’ loan policies and

procedures

Target borrowers

Others

Question and Answer

Ms. Khin Nilar Aung Assistant

General Manager CB Bank

Mr. Sai Naw Line

Management Associates CB

Bank

11:20-12:00 Session 2: Dissemination of New and

Trucking/Logistics Technologies

Driver training technologies

Trucking eco-technologies

Trucking safety technologies

Trucking management technologies

Others

Mr. Tan Hwee Hua, Technical

Trainer, ST Engineering Land

System, MAN Trucks & Bus

Singapore

12:00 – 13:00 Lunch

13:00-14:00 Group Discussion

Group 1: Finance

30 min discussion guided by key questions

All participants and CB Bank

Group 2: Truck Technologies

30 min discussion guided by key questions

All participants and MAN

10 min: wrap up

10 min: Presentation by each group

Q & A

All participants

14:00 – 14:30 Present Business Plan Guide Mr. Quan Ahn Nguyen,

Program Specialist, Mekong

Institute (MI)

14:30 – 14:45 Way Forward and Closing Remarks Mr. Madhuriya Kurma Dutta,

Ditrecror, TIF, Mekong

Institute

14:45-15:30 SME’s Business Plan Development

Technical assistance provided to prospective SMEs

to facilitate their Access to Finance for investment in

new and upgrading truck technologies

All participants, GIZ and MI

team

, Deputy

30

Ho Chi Minh City

Thursday, July 12, 2018

TIME ACTIVITIES AND KEY TOPICS SPEAKER | PRESENTER

08:00 – 08:30

Registration

08:30 – 08:40 Welcome Remarks

Ms. Charurin Pholhinkong,

GIZ

08:50 – 09:00 Workshop Overview

Workshop Objectives

Expected workshop output and outcomes

Workshop agenda

Mr. Madhuriya Kurma Dutta,

Ditrecror, TIF, Mekong

Institute

09:00 – 09:30 Introduction of participants and companies

09:30 – 10:00 Session 1: Study findings on Financial Products and

Sevices

Overview of Green SME Finance Initiatives in

the Mekong Countries

Key findings to Access to Finance

Mr. Quan Ahn Nguyen,

Program Specialist, Mekong

Institute (MI)

10:00 – 10:30 Group photo and Coffee / tea break

All participants

10:30 – 12:00 Session 2: Financial and Leasing Products and Sevices

Types of financial products and services

Financial institutions’ loan policies and

procedures

Target borrowers

Types of leasing products and services

Leasing institutions’ loan policies and

procedures

Target lessees

Financial Institutions

Sacombank: 10;30 – 11:15

Mr. Pham Le Kien, Deputy

Director General

TP Bank: 11:15 – 12:00

Mr. Lưu Quốc Khánh,Head of

Sales,Ho Chi Minh Auto

Finance Centre

12.00 – 13.00 Lunch

13.00 – 14.00 Session 2: New and Trucking/Logistics Techonogies

Driver training techonogies

Trucking eco-technologies

Trucking safety technologies

Trucking management technolgies

Others

Mr Le Quang Lam, Manager

Market Analysis & Product

Planning Department, Hino

Motors Vietnam Ltd

14.00 – 14.30 Session 5: Business Plan Outline Mr. Quan Ahn Nguyen,

Program Specialist, Mekong

Institute (MI) 14:30 – 15:00 Way Forward and Closing Remarks Mr. Madhuriya Kurma Dutta,

Ditrecror, TIF, Mekong

Institute

31

11.3. COMPANIES LISTED FOR BUSINESS PLAN DEVELOPMENT

Country Company Type of

Business

Entity

Sector Representative Address and Contact

Details

Myanmar

1. Htun

Padaethar

Freight

Transport

Freight

Transport

Logistics and

Transport

Mr. Kyin Thein,

Managing Director

Email:

kyinthein99@gmail.com

Tel: +95 9 540 7667

2. Yangon MK

Group Co., Ltd

Transport Logistics and

Transport

Mr. Myint Kyi,

Chairman

Email:

mkgrouptransport@gmail.co

m

Tel: + 95 9 511 1454

3. Royal Lwin

Brothers Co.,

Ltd

Logistics and

Transport

Mr. Than Lwin,

Managing Director

Email: lwinbros@gmail.com

Tel: + 95 9 511 5133

4. Moe Nan Taw

Transportation

Co., Ltd

Transportation Logistics and

Transport

Mr. Aung Moe,

Managing Director

Email:

aungmoe2772@gmail.com

Tel: + 95 9 516 2622 / 95 9

86 33 771

5. Nway Nway

Thiri Co., Ltd

Logistics and

Transport

Mr. Kyaw Min,

Managing Director

Email:

kyawmincontainerservices@

gmail.com

Tel: + 95 9 5058215/95 9

448006727

6. Tine Kyaw

Moe Co., Ltd

Logistics and

Transport

Mr. Lwin Tun,

Managing Director

Email:

lwintun999@gmail.com

Tel: + 95 9 511 9895

7. Uni-Link

Logistics Co.,

Ltd

Logistics

services

Logistics and

Transport

Dr. Nay Oo,

Managing Director

Email:

nayoo.unilink@gmail.com

Tel: 95 9 73 13 11 55/ 95 9

511 5808

8. Khit Lite One

Logistics &

Trading Co.,

Ltd

Logistics &

Trading

Logistics and

Transport

Mr. Aung Moe,

Managing Director

Email: moekpg1@gmail.com

Tel: + 95 9 797 711 999/ 95

9 254 959 992

9. Grand Fortuna

Co., Ltd

Logistics and

Transport

Mr. Myint Wai,

Managing Director

Email:

myintwai@grandfortuna.net

info.grandfortuna@gmail.co

m

Tel: 95 9 540 1546

10. Mo Po Kho

Co., Ltd

Logistics and

Transport

Mr. Aung Gyi,

Managing Director

Email:

info@mopokho.com.mm

Tel: 95 9 43 13 68 77

32

Country Company Type of

Business

Entity

Sector Representative Address and Contact

Details

11. Hercules

Logistics

Logistics

services

Logistics and

Transport

Ms. May Thet Zaw,

Business

Development Director

Email:

maythetzaw@herculeslogs.c

om

Tel: 95 9 977 181 679

12. Nature Cold

Chain

Logistics &

Refrigereation

Services Co.,

Ltd

Cold Chain

Logistics

Logistics and

Transport

Ms. Yin Yin Aung,

Managing Director

Email:natureclr@gmail.com

natureco2017@gmail.com

Tel: 95 9 785 133 746

Cambodia 1. Camwill Global

Co.,LTD

Logistics Logistics and

Transport

Mr.Ni Sareoun

General Manager

Email:

info@camwillglobal.com

Tel: 023 231 726

Website:

www.camwillglobal.com

Address: #2j, St 1980,

Phnom Penh Thmey, Sen

Sok, Phnom Penh,

Cambodia

Viet Nam 1. GOLDEN SHIP

Co., Ltd

Shipping Logistics and

Transport

Mr. Nguyen Xuan Bac,

CEO

bac.nx@goldenshipvietnam.

com

andrew@goldenshipvietnam.

com

Tel: 84.225.355 5242 Fax:

84.225.355 5273

2. Exgo

Technologies

Tech Logistics and

Transport

Ms. Diep Nguyen

Director

diep.nguyen@glv.com.vn

3. INterlogistics Logistics Logistics and

Transport

Ms. Nguyen Thuy

Loan Dep. Director

loannt@interlogistics.com.vn

33

11.4. PHOTOS

Workshop in Rayong, Thailand

Workshop in Yangon, Myanmar

Workshop in HCMC, Vietnam

34

11.5. BUSINESS PLAN GUIDE

1. SECTION 1. Company Overview

1.1. Legal status

- Company name

- Business address

- Telephone number

- Fax number

- Email

- Website

- Legal establishment of business and Date

- Business registration certificate, serial number, and date

- Business license number, and date, if any.

- Core business and sector or industry

- Charter capital

- Owner and Shareholders

- Number of emplyees

- Legal representative

1.2. Products and Services

- The list of products and/or services with full description of key product/service

attributes, i.e. type, size, quality, cost per unit, and etc.

- What makes your product and/or service different than those in the market?

- Productivity

- Technology, and environmental impact, if any.

- Customers and market share

1.3. Current Business and Financial Analysis

1.3.1. Business operation

- Business plan

- Implmentation of Business plan through (i) business contracts, (ii) sales and

revenue performance, and. (iii) market development

- Business result

- Advanatges and challenges

- Solutions for business development

1.3.2. Financial status

No Financial Indicator Year-16 Year-17

Year-18

1 Revenue

2 Gross profit

3 Profit before taxes (PBT)

4 Total asset

5 Current asset

35

No Financial Indicator Year-16 Year-17

Year-18

6 Fixed asset

7 Equity

8 Current liabilities

9 Mid-term, and long-term

liabilities

1.3.3. Current Cash flows. Total amount of (i) cash received from sales monthly or yearly;

(ii) cash payment; and (iii) cash balance

1.3.4. Demand for financing

1.3.5. List of bank loans. (i) number and total of loans; and (ii) financiers

1.3.6. Business relationship with finacial institutions, e.g. commercial banks

Financial

Institution

Evaluation

Excellent Very good Good Satisfactory Poor

2. SECTION 02: MARKET ANALYSIS

2.1. Market Information

- The average price of the your company’s product and / or services in the current, and

expanded markets, if any.

- Whether or not the average price of your company can sufficiently cover costs.

- Major competitive advantages of your company in terms of geographical condition,

quality of products and services, pricing, and others, if any.

- Analysis of market performance as a whole: (i) prices, (ii) volumes, (iii) numbers of

market suppliers, (iv) supply capabilities, (v) number of customers.

Company Types of Products and

Services

Market share Other

2.2. Pricing

- Company’s pricing strategy and price formation method

- Company’s discount and / or promtion policies, if any.

36

- Company’s product and / service development in connectivity with pricing strategy

3. SECTION 3. FINANCIAL ANALYSIS

Financial analysis is an important part of business planning. A financial analysis needs to be

realistic with your financial projection and estimates.

3.1. Sales Projection

Year-19 Year-20 Year-21

- Units Sold

- Sales Price per Unit

- Total Sales

3.2. Projected Cost and Benefit

Determining your cost of product and / or services is important in terms of (i) how much your

customer are charged; and (ii) determination of the selling prices.

- Cost factors to produce product and / or services.

- Costs that company will have to do in order to provide product and /or services to

your client.

- List and calculate all costs to be incurred, e.g. direct and indierect costs (business

operating costs, financial costs, and others).

- Profit calculation (gross and net profit)

- Cash flows

- Return on investment

3.3. Financing (Capital need)

- Capital need in the form of (i) bank loan; (ii) equity; and/or (iii) combintation bank loan

and equity.

- Loan terms: (i) short term, (ii) medium term, (iii) long term

- Loan repayment and schedule, if bank loan.

3.4. Projected Cash Flows

The cash flow report is essential to determining if sales and current cash and finance

situation will support business operation and development. Preparing the cash flow for

business activity can refer to the cash flow statement.

CASH FLOW STATEMENT

Monthly Quarterly

Yearly

1. Operating Cash Inflow

Cash available

Projected Sales

Total inflow of cash

37

2. Operating Cash Outflow

Payment to suppliers for materials

Operating costs

Financial costs

Other costs

Equipment purchase

Taxes paid

Total outflow of cash

3. Cash Balance

3.5. Banlance sheet

A Balance sheet demonstrates the company’s financial position, which is of extreme

importance to the shareholders, employees, and financial institutions. It also provides the

company with the financing needed to engage in business operation and development.

Year Year

ASSETS

Current Assets

Cash at hand

Cash in bank

Inventory

Accounts receivables

Other

Total Current Assets

Fixed Assets

Land

Buildings

Plant & equipment

Fixtures & fittings

Vehicles

Other

Total Fixed Assets

Total Assets

LIABILITIES & OWNER’S EQUITY

Current Liabilities

Accounts payable (trade creditors)

Short-term loans

Interest payable

Taxes payable

Accrued salaries & wages

Other current liabilities

38

Total Current Liabilities

Long-term Liabilities

Long-term loans

Other long-term liabilities

Total long-term liabilities

Owner’s Equity

Owner’s Investment

Retained earnings

Total owner’s equity

Total Liabilities & Owner’s Equity

3.6. Profit & Loss Statement

The projected profit and loss statement (Income Statemet) will calculate your projected net

profit or net loss before and after taxes. The document shows the difference between your

income and expense and it tells you if your business will be profitable or not.

Year

Sales

Cost / Cost of Goods Sold (COGS)

Gross Profit

Operating Expenses

Salary (office & overhead)

Social Security

Supplies

Repairs/Maintenance

Advertising

Accounting and Legal

Others

Depreciation

Financial costs

Taxes

Total Expenses

Net Earning

Dividends

Adjusted to Retained Earnings

FINANCIAL ANALYSIS AND PROJECTIONS

Financial

Indicatior

Current Data Projections

Year-19 Year-20 Year-21 Year-22 Year-23

Year-16 Year-17 Year-18

Profit and Loss

Total Sales

Total Cost of

Goods Sold

Gross Margin

Operational Cost

EBITDA

Depreciation

EBIT

Financial costs

EBT

Taxes

Net Income

Balance sheet

Total Assets

Liabilities

Equity

Assets – (Liability

+ Equity

Financial

Indicatior

Current Data Projections

Year-19 Year-20 Year-21 Year-22 Year-23

Year-16 Year-17 Year-18

Financing Need

Debt Financing

Equity Financing

Others

FINANCIAL RATIOS

- Net Profit Margin = Net Profit / Sales

- Return on Equity = Net Profit / Shareholder’s Equity

- Return on Asset = Net Profit / Total Asset

- Growth of Sales = (Sales of current year – Sales of previous year) / Sales of previous year

- Growth of Asset = (Asset of current year – Asset of previous year) / Asset of previous year