Resolving capital problems for SMEs

15:19 | 08/03/2016 Economy

(VEN) - According to the Vietnam Chamber of Commerce and Industry (VCCI), around 30 percent of small and medium-sized enterprises (SMEs) have access to credit from banks, while the remainder has raised capital from unknown sources.

Resolving capital problems for SMEs

Banks will strongly pour capital into trade and production activities

To resolve obstacles facing SMEs, management agencies and commercial banks have devised several effective solutions.

SMEs have contributed nearly 40 percent to gross domestic product (GDP) and created jobs for workers. However they have always faced difficulties, especially in credit access. Around 30 percent of SMEs have accessed bank capital, while the remainder has raised capital from unknown sources. The main reason is due to lack of mortgages. In addition, preferential capital in banks remains limited.

MSc. Nguyen Truc Van from the Ho Chi Minh City Institute for Development Studies said that lack of capital was the biggest difficulty for SMEs. According to the General Statistics Office, a number of SMEs with capital of under VND5 billion remained major.

VCCI, Ho Chi Minh City Branch Deputy Director Tran Ngoc Liem said that free trade agreements have had impacts on the Vietnamese economy as well as trade and production activities. Therefore, practical solutions to promote links between SMEs and banks in order to bring capital flows into trade and production activities are required.

The Ho Chi Minh City Credit Guarantee Fund’s Head of Enterprise Support Division Do Tan Truc said that Ho Chi Minh City has actively implemented many solutions to resolve problems in capital access for SMEs such as the demand stimulation program via investment and the program on promoting links between enterprises and banks. The fund will implement legal advice for enterprises via cooperation with the State Bank of Vietnam, Ho Chi Minh City Branch.

SMEs should enhance restructuring of trade and production activities in accordance with their current financial situation. In addition, building investment methods following capacity in terms of capital, technology and human resources is needed. Promoting financial transparency to effectively use resources, reduce costs and risks for SMEs and banks is also necessary.

The program on promoting links between enterprises and banks will have credit packages facilitating SMEs and support industries in Ho Chi Minh City. As many as 18 units from 17 banks have registered support packages for VND211.5 trillion and US$15 million for short-term Vietnamese-dong interests of less than seven percent a year, and medium to long-term interests of eight to ten percent a year.

Banks will also raise capital for trade and production activities and five priority sectors including exports, agriculture, support industries, SMEs and high-tech businesses.


Thanh Anh