The Bank for Agriculture and Rural Development of Vietnam (Agribank) has loaned a total VND45 trillion (US$2.8 billion) to small and medium-sized enterprises (SMEs) so far this year, accounting for 29 per cent of its total lending.
Le Van So, Agribank general director, said at a recent conference that his bank has been developing a business strategy to target smaller companies.
Besides supplying loans to traditional customers in the agricultural sector, the bank is also giving priority to SMEs, he said.
SMEs are facing difficulties in accessing loans because most of them have few assets to offer as collateral.
Their financial reports are not considered a reliable sources on which to base decisions to extend loans, he said.
Moreover, SMEs tend to be particularly vulnerable to market downturns, another factor in banks’ reluctance to lend money.
Few banks pay attention to service-promotion and consulting activities, making it even more difficult for SMEs to access banking services and secure loans, So said.
Under a strategy supported by the World Bank and the Asia Development Bank, small companies are now provided better lending and payment services as well as new products including payment guarantees.
Agribank, therefore, will develop services such as business leasing and fixed-asset purchases to support SMEs, he said.
Ayaumi Konisi, Vietnam director of the Asia Development Bank (ADB) said his bank was now making preparations to help Agribank achieve its strategy to targeting SMEs.
Nguyen Dong Tien, deputy governor of the State Bank, said the central bank would continue policies to improve cooperation among SMEs and banks. It intends to establish a technical foundation to ensure commercial banks act in the best interests of SMEs.
Vietnam now has over 240,000 SMEs, accounting for about 96 per cent of the country’s total number of enterprises. The sector contributes 30 per cent of the total gross domestic product and employs 25 per cent of the total labor force.
The country targets to see 500,000 SMEs operational within the next five years.
VET
Vietnamese
