16:17 | 18/06/2015 Economy
Raising capital remains one of the biggest difficulties for companies, and so programmes that help connect businesses with capital sources play a very important role, a conference heard in HCM City yesterday.
Nguyen Manh Tue, deputy head of the Department of Planning and Investment's economic sub-department, said there are around 150,000 businesses in HCM City, of which 97 per cent are small and medium-sized enterprises. — VNA/VNS Photo Vu Sinh
Pham Ngoc Hung, deputy chairman of the HCM City Union of Business Associations (HUBA), said Viet Nam is integrating deeply with the global economy with a series of free trade agreements either signed or under negotiation.
But a recent study by HUBA came up with the extremely worrying result that 65 percent of local firms are vague about the opportunities and challenges thrown up by FTAs, he said.
Asked what was the biggest difficulty in the context of deeper integration, companies said it was capital followed by trade barriers, he said.
Nguyen Manh Tue, deputy head of the Department of Planning and Investment's economic sub-department, said there are around 150,000 businesses in HCM City, of which 97 percent are small and medium-sized enterprises.
The city has many programmes to support enterprises – such as organising dialogues with government agencies to help resolve their difficulties in a timely manner, he said.
The city does surveys on businesses' demand for credit and organises programmes to connect businesses and credit institutions, he said, adding that banks have signed agreements to provide loans worth more than VND120 trillion (US$5.5 billion) to businesses in the past three years.
It also provides VND100 million ($4,591) for each project in the agricultural sector under a resolution issued on June 8, he said.
Speaking about the HCM City Credit Guarantee Fund for Small and Medium Enterprises, Tran Buu Long, its deputy director, said to qualify for credit guarantees, enterprises must have good projects, own at least 55 per cent of the projects, have collateral worth at least 15 per cent of the loan, and are not tax defaulters.
However, several attending business executives said SMEs face difficulties in getting bank loans.
Tue said the city needs to establish a fund for supporting SMEs.
Marcel Laneville, senior trade commissioner at the Canadian consulate general in HCM City, said, like Viet Nam, Canada's private sector too is dominated by SMEs, which are obviously vital to the economy.
"Canada actively supports SME development in Viet Nam as we believe these enterprises will lead to changes, like improving competitiveness and productivity, driving growth and reducing poverty."
Canada is implementing two projects in Soc Trang (2011-17) and Tra Vinh (2014-20) provinces that focus on local SMEs, he said.
The conference was organised by the HCM City Union of Business Associations, HCM City Union of Friendship Associations, the city Departments of Industry and Trade and Planning and Investment, and the Viet Phu Payment Services Support Corporation./.