BANDAR SERI BEGAWAN
Businesses must have a strong local base before seeking financing opportunities and considering overseas venture, business industry stakeholders said.
Having a promising business performance is crucial for small and medium-sized enterprises in securing financial assistance, said Pierre Imhof, CEO of Baiduri Bank.
“You need to have a strong base in Brunei if you want to grow outside. This may not apply to all businesses but generally, that’s what we look for,” he said during a business forum held yesterday.
Imhof also said that obtaining financing used to be a major challenge for SMEs but that not is the case today.
“I think that the issue of access to finance through the traditional banking network is more relevant for either startups or very small businesses which are not able to bring in their own share in the normal structure of financing,” the CEO said.
“The regulatory environment is not anymore what it was 10 years or 2 to 3 years ago…the access is much easier,” he added.
Sharing the same sentiment with Imhof at the forum was CEO of Darussalam Enterprise (DARe), Javed Ahmad, who said that a good business proposal and management would normally help in convincing banks to lend money.
“As a former banker, I would go far to say that if there is a good business proposal with a committed management team, there is no reason why you can’t get financing in Brunei,” he said.
He added: “Bank Usahawan might be your first step, but once you are actually able to walk then such bank doesn’t have the capacity to provide large financing then you go to banks like Baiduri to get financing for growth.”
Bank Usahawan is the latest financial institution that finances local micro, small and medium enterprises (MSMEs) in industries including food and beverage, agriculture, retail and transportation.
Javed cited banking and telecommunication as the sectors that have strong market bases and great potentials to expand overseas.
“If you look at what other businesses in Brunei that have a critical mass to go out internationally, I would say banking and telecommunication sectors. They have the capital base and management team to be able to go out,” he said.
A majority of the businesses in the sultanate are in the food and beverages (F&B) sector, he said.
“If you are operating as a business (startup) in F&B, telling you to go out and export is a challenge. These are the startups that don’t have the (solid) management… When you look at what we (DARe) can do, in order to promote businesses, I will never say that you should not look at the Bruneian market,” he said.
If a business does not have a strong base locally it is less likely for businesses to be successful outside of Brunei, Javed added.
For foods businesses, international certification is a major requirement.
“If you want to export, make sure it is certified internationally. Then you will be able to go to banks and tell them ‘look, I have these successful products that meet standards and has demands in the international market…’ then, asking for financing becomes much easier,” said Javed.
Over 100 forum participants joined the two-day forum organised by Asia Inc Forum through its 12th Local Business Development Programme held at Radisson Hotel.
The annual event seeks to develop Bruneian business founders, owners and top managers through leadership and entrepreneurial skills development by sharing ideas, experiences and insights.