Small-and-medium sized enterprises (SMEs) would be important partners of Bank for Foreign Trade of Viet Nam (Vietcombank) in the future. — Photo nganhangbanle.org

Small-and-medium sized enterprises (SMEs) would be important partners of Bank for Foreign Trade of Viet Nam (Vietcombank) in the future, said Nghiem Xuan Thanh, the bank’s chairman of the management board.

Thanh said on Saturday during a workshop that Vietcombank is working to become the leading bank in the retail banking sector by the year 2020.

Statistics reveal that nearly 98 per cent of Vietnamese businesses are SMEs. These businesses contributed 30 per cent of the country’s total investment and 40 per cent of GDP, as well as employ 50 per cent of labourers.

Of the total SMEs, up to 70 per cent were micro firms, 28 per cent small and 2 per cent medium sized.

The rate of information technologies and management applications at the SMEs has remained low. Only 8 per cent of the companies, which are mostly foreign direct invested firms, have applied advanced IT. Another 12 per cent have internal networks, while 2 per cent have their own websites.

Another survey on household enterprises from PwC revealed that 85 per cent of start-ups received investments from their families. Also, some 40 per cent of the small businesses will transfer their companies to the next generation in the next five years.

The survey, which conducted interviews with 2,802 household businesses in 50 countries, also said that the such companies often faced issues of control system shortages, money flow management and discovering frauds.

Sharing ideas, Vietcombank said bank credits granted to SMEs have not been up to their potential, as only 33 per cent of the businesses had access to loans, despite their being increasing numbers of loans made available to SMEs.

The outstanding loan balance in Ha Noi rose from VND183 trillion (US$8.2 billion) in 2010 to VND345 trillion in 2015.

The reason for this was that there were barriers between banks and SMEs. Most SMEs were afraid of complicated procedures, high interest rates and lack of mortgage assets.

Vietcombank said it would provide solutions to connect banks and SMEs in the future.

It would also establish special policies and customer care departments to serve SMES.

The bank has also targeted to increase the rate for SMEs and individuals to 45 per cent of its total outstanding loan balance. — VNS