Small and medium-sized enterprises (SMEs) are playing an increasingly important role in the Vietnamese economy. However, SMEs are facing difficulties in their operation. The biggest difficulty is the barrier to their access to bank loans.
Many banks said that had concentrated their investment on SMEs as they had increasingly become effective and suitable with banks’ capital capabilities. However, many SMEs say it is difficult to access to bank loans.
A recent survey about the landscape of SMEs conducted by the Enterprise Development Department under the Ministry of Planning and Investment shows that only 32.38 per cent of SMEs can access to bank loans, 35.24 per cent find it difficult to get bank loans and 32.38 per cent do not get access. The main difficulty of SMEs is that they lack assets to mortgage their loans. The number of enterprises accounts for up to 77 per cent. Also, enterprises do not provide reliable information about projects. Pham Linh, director of VIB Bank, Ho Chi Minh City branch, said one of the challenges for SMEs was their poor business administration and a lack of information about products and markets. Another barrier is that SMEs have not paid attention to providing information to banks, especially their financial transparency. Therefore, banks face many difficulties in assessing credibility of enterprises before making decisions to invest in them.
Nguyen Trong Nghia, general secretary of the Vietnam Banking Association, said that in the future, SMEs and banks in Vietnam would need support from the Government with credit guarantees, credit evaluation, technical support and special funds to provide loans for SMEs. So far, the Government has planned the establishment of a credit guarantee fund for SMEs, but it has been implemented in five provinces and the effectiveness has not been high yet.
To date, Vietnam has around 200,000 SMEs, contributing 30 per cent of GDP. According to the 2010 strategy, Vietnam will have 500,000 SMEs. They are potential clients for banks to serve. Such banks as VIB Bank, Sacombank, ACB and SCB have developed programme to pour their capital investment to SMEs. Other State-owned commercial banks, including Vietcombank, Incombank and BIDV have had credit programmes for SMEs also.
Pham Huy Hung, general director of Incombank, said to provide services for SMEs was of great potential, helping banks increase their credit, diversify services and minimise risks. However, to remove obstacles facing SMEs, there should be suitable solutions and mechanisms of both banks and SMEs. Two years ago, Incombank established a department specialising in providing loans for SMEs and the bank has implemented some measures to expand their credit services to SMEs. So far, total loans for SMEs of Incombank accounts for between 50 and 60 per cent of the bank’s total loans.
Hai Dao
Vietnamese
