The Hanoitimes - A shortage of capital and
difficult access to bank loans were the most challenging issues for small and
medium-sized enterprises (SMEs) during the recent economic slowdown.
Nguyen Bich Ngoc, from the Institute of
Strategy and Policy on Finance under the Ministry of Finance said one of the
major sources of finance for SMEs was bank loans, but only about 20 percent of
businesses were able to access loans due to their small size and production and
a lack of financial transparency.
Experts said supporting SMEs with capital was
done in most developed and developing countries with funds assisting SMEs
development.
In Vietnam, the establishment of such a fund
was approved 14 years ago and the Government issued a decree and several
regulations two years ago, but the fund is not yet operational.
Also, the credit guarantee fund model, which
was established 10 years ago, has not helped SMEs because enterprises have not
wanted to pay fees for the fund with not-for-profit purposes.
Experts said the goal of establishing a new
fund for SMEs development should be new ventures as they required smaller
amount of capital. As a result, the fund would help many new SMEs rather than
those wanting to expand their production.
Nguyen Minh Phong, from the Hanoi Institute
for Economic and Social Development, said the State should have several
mandatory policies requiring commercial banks to reserve loans for SMEs.
General Secretary of the Vietnam Chamber of
Commerce and Industry Pham Thi Thu Hang said a credit rating system would
improve access to bank loans while cutting service fees and loan lending
procedures.
However, she said credit rating agencies would
face many challenges in rating local businesses’ credit due to a lack of
transparency in the financial capabilities of SMEs.
General Secretary of the Hanoi Association of
SMEs Nguyen Huu Su said all SMEs lacked financial understanding, especially
with larger banks.
Tax exemptions have helped SMEs, but they have
also impacted on the country’s revenue. Hang said tax incentives over a short
term could support businesses, but they would affect the market mechanism.
Director of Market Development under the State
Securities Commission Nguyen Son said attracting capital through the stock
market or bond issuance by groups of businesses would be a better way of
supporting SMEs.
Vietnam should look at applying a type of
capital mobilization plan alongside an appropriate legal framework, in time for
the world and domestic stock market’s recovery, Son said.
To Hoai Nam, vice chairman of the Vietnam
Association of SMEs, said the Government should complete the credit guarantee
fund model as all 11 existing funds have operated ineffectively.
He added the Government should help the
private sector access official development assistance loans while
micro-financing policies should be spread throughout rural and remote areas.
Vietnam now has about 500,000 SMEs. In the
past 10 years, the sector has played an important role in the economy, paying
taxes worth one-third of the economy’s total revenues, creating jobs for 5.6
million workers and contributing to social security.
VNS
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