SMEs Call for More Support from the Government

More than 250 participants, including micro financiers, local and international companies, development agencies and ACCA members attended the conference. The conference looked at the current trends in the Small and Medium-sized enterprises (SME) sector development, finance solutions for SMEs, how to enhance SME investment and trade capacity, how SMEs overcome the challenge of being small as well as how to enhance SMEs competition capacity by improving access to markets in the globalisation.

 

The conference addressed that official institutions, such as banks, through which these funds and products are often channelled, need to be encouraged to promote them more actively to their SME clients. The banks remain the most significant source of external finance for formal small firms, bank finance is generally only available to those businesses that can offer collateral or a strong record of generating profit. This leaves a large number of SMEs which need large investments, but which have mostly intangible assets. While it is right that much effort is invested in encouraging banks to reach out to the SME sector and provide more suitable financial products to existing clients, alternatives to bank lending need to generate similar attention and investment in order to build more complete financing markets for SMEs.

 

Ms Pham Thi Thu Hang, VCCI Secretary General cum Director of SMEs Promotion Centre said: "In recent years, the number of new businesses increased but mainly small and very small enterprises, so they face difficulty in accessing and expanding market. In the current difficult economic situation, the inventory remaining at a high level is a major challenge not only for SMEs, but also for big enterprises. To overcome this difficulty, businesses should review the whole system of production and distribution, pay attention to the issue of production innovation and technology applications design innovation to further participate in the global chain, exploit the domestic market and enter niche markets. At the same time, enterprises should closely involve in the cluster system, industrial chain, industrial zone and business associations to improve the quality of products at reasonable prices, thereby improving market access capability ". General cum Director of SMEs Promotion Centre said: "In recent years, the number of new businesses increased but mainly small and very small enterprises, so they face difficulty in accessing and expanding market. In the current difficult economic situation, the inventory remaining at a high level is a major challenge not only for SMEs, but also for big enterprises. To overcome this difficulty, businesses should review the whole system of production and distribution, pay attention to the issue of production innovation and technology applications design innovation to further participate in the global chain, exploit the domestic market and enter niche markets. At the same time, enterprises should closely involve in the cluster system, industrial chain, industrial zone and business associations to improve the quality of products at reasonable prices, thereby improving market access capability ".

Ms Le Thi Hong Len – Head of ACCA Vietnam says: ‘The SME sector is a critical one to the future success of the Vietnam economy. More than 97 percent of all enterprises in Vietnam are SMEs and they provide more than half the employment opportunities in the country, which underlines their importance. Small businesses, because they can act quickly, will also lead the development of the Vietnam economy, but they face a number of challenges, including how to access finance, and this conference will look  at how SMEs can be supported and where they can find the help and advice they need, including from accountants.’

 

Ms Rosana Mirkovic Head of SME Policy at ACCA, shares ‘Small businesses around the world all face the similar challenge – such as regulation, access to finance and access to cross border trade. Supporting SME development ought to be an active agenda across government departments. For example, those departments responsible for fiscal policy, justice or employment law may well have a bigger effect on SME growth and access to finance – through their decisions on tax policy on equity funding, setting up or developing better access to efficient credit information facilities right through to well-functioning property and contract law frameworks.’

 

‘There are persistent market failures that stand in the way of a long-lasting change in SME sector development and ACCA very much looks forward to hearing the views of Vietnam SMEs as this will inform the work of the ACCA Global Forum for SMEs, which actively champions the needs of the sector,’ concludes Ms Rosana.