SMEs struggle to access credit

Wednesday, Aug 31, 2016 09:09

Transactions in progress at a VPBank branch. Improving businesses' financial capacity is necessary to help them enter global value chains, experts say. — VNA/VNS Photo Tran Viet
HA NOI (Biz Hub) — While support to enable firms to engage in global value chains has become pressing amid rapid international integration, businesses are still struggling to access credit, especially  small- and medium-sized enterprises (SMEs), according to the Ministry of Industry and Trade.

The ministry estimated that just a modest 30 per cent of SMEs could access banking loans, adding that the majority of businesses lacked experience and did not have adequate assets for a mortgage or transparent enough financial reports.

Capital, human resources and technology were the three major barriers for Vietnamese enterprises when entering global value chains, the ministry said.

Improving their financial capacity was necessary to promote their participation in global value chains while SMEs were still in the dark about international integration, the ministry said.

Quyen Anh Ngoc, Director of the ministry's Multilateral Trade Policy Department said at yesterday's conference jointly held by the Viet Nam Chamber of Commerce and Industry (VCCI) and VPBank in Ha Noi that businesses should be active in working with banks in sectors of their advantage to gain financial resources.

Ngoc also urged businesses to develop appropriate medium and long term business strategies, which would be helpful in asking for credit.

In addition, SMEs should improve their awareness of the commitments of free trade deals, cut inefficient investments to focus finances on their core values and improve competitiveness, he said.

Those factors were important in building trust with credit institutions for the development of SMEs to get funding, according to Ngoc.

Experts at the conference said that improving the business climate together with the national competitiveness were needed to enable Vietnamese firms to participate in global value chains.

There were around 600,000 businesses in Viet Nam, 96 per cent of which were of small and medium size. — VNS

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