European Fund to Help Vietnam Develop SMEs

European Fund to Help Vietnam Develop SMEs

The European Commission-financed Small- and Medium-Sized Development Fund (SMEDF) project was officially launched in Hanoi on March 24 with the aim of helping small- and medium-sized enterprises (SMEs) in Vietnam develop strongly in the current highly competitive market.

The 15 million-euro fund will provide medium and long-term capital for SMEs to help them develop production as well as create jobs for society. SMEs employ just 10 per cent of the country's total workforce but have the potential to employ many more.

Ambassador and Head of the Delegation of the European Commission Markus Cornaro said the EC is interested in assisting Vietnam's fight against poverty and its efforts to achieve sustainable development through the development of the private sector. The EC has realized the importance of providing better financial services to SMEs to stimulate them to generate more jobs, the official said.

Many SMEs in Vietnam are facing difficulties in mobilizing capital for their projects while banks are lacking medium and long-term capital to offer to these SMEs.

The EC has decided to inject total funding for the SMEDF project into three or four Vietnamese banks to assist them with the additional capital required to support SMEs.

In addition to the funding, the EC requested those banks improve their capacity to distribute capital effectively and to enhance staff qualifications.

The EC official said the training of the banking staff would help minimize risks and boost the banks' effective operation, allowing them to offer the best services to SMEs.

To help its funded SMEDF project operate at its best, the EC has pledged to provide 995,000 euros for technical assistance. The technical aid, apart from supporting the planning and implementation of the project, will be used for personnel training of staff in Vietnamese banks.

Nguyen Quang Khai, from the SMEDF project's training section, said around 100 banking staff will be trained by Vietnamese and EC experts each year over a three-year period.

Economists expect that investment for the development of SMEs in a developing country like Vietnam will help advance the country's economy. With the provision of capital for banks, the EC has strengthened SMEs in Vietnam allowing them to enhance production capacity and sharpen their competitiveness in the market economy.

VoV, VIR