Small firms fail to make use of plentiful assistance in HCM City: conference

Friday, Oct 04, 2019 09:23

A conference held in HCM City on October 3 discusses how to assist SMEs’ development. — VNS Photo Gia Loc

A number of organisations in HCM City have provided assistance and consultancy to small and medium-sized enterprises while banks have offered them loans on easy terms but they do not make use of either the consultancy or loans, a conference heard in HCM City on October 3.

Tran Ngoc Liem, deputy director of the Viet Nam Chamber of Commerce and Industry’s HCM City office, said representative offices of central agencies in the city and the VCCI have set up centres to assist SMEs.

Many banks have a dedicated division for providing consultancy and credit to SMEs, he said.

But SMEs do not make use of the centres to learn about policies and laws, or take advantage of support from the banks to get loans, he added.

Tran Lien Phuong, research director at market research company Insight Asia, said: “The multiplicity of agencies offering assistance causes confusion among SMEs in choosing from them.”

The Government should have a single channel providing information about these centres to SMEs and ensure that the consultancy they provide is optimal, she said.

Her company’s studies found that many SMEs in the manufacturing sector want an efficient and sustainable production environment to develop their business, she said.

But in its absence, they continue to be small or very small, she said.

Their weaknesses along with the rapid changes in the global economy make them increasingly vulnerable, she added.

An executive from a city bank said many of SMEs do not have any strategy for getting loans before contacting banks.

They would have warehouses worth billions of dong to mortgage against loans, but built without official approval meaning banks could not accept them, he said.

Some delegates suggested that SMEs could use their contracts with customers and hi-technology production processes as assets to mortgage.

SMEs should have at least 40 per cent of owners’ equity capital and not just 20 per cent, and they should not be highly leveraged, they warned.

Do Khac Cuong of Microsoft Viet Nam said digital transformation could engage SMEs’ customers, empower their employees, transform their products, and optimise their operations.

Lam Dieu Tam Hieu, deputy general director of Kizuna JV Corporation, said many SMEs want to have warehouses or manufacturing facilities at industrial parks, but cannot afford them.

She suggested that property companies should build warehouses with proper infrastructure for SMEs to lease.

This model could save SMEs a lot of money, she added. — VNS

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