Support provided to small and medium-sized enterprises (SMEs) will not be in cash, but rather take the form of favourable conditions in order for SMEs to grow, Deputy Minister of Planning and Investment Dang Huy Dong has said.

Dong spoke at an online conference held by the Government’s e-portal on Tuesday, saying that the draft Law on Support to SMEs, which was under discussion by the National Assembly and is expected to be passed next week, would focus on three programmes so as to realise the Government’s goal of doubling the number of firms to one million by 2020.

Those include support to firms converting from business households; support to start-ups and the development of the ecosystem; and support to firms involved in the global value chain.

“Support provided in cash is inefficient and difficult to implement, given the Government’s limited budget,” Dong said, adding that SMEs would instead receive support in market information, administrative procedures, tax and credit incentives.

According to Nguyen Van Phuc, former Chairman of the National Assembly Economic Committee, this law was critical to the development of businesses but the issuance of this law would require changes in many policies, such as ones on land, to create a synchronous and consistent legal system to facilitate business operation.

Phuc said that support should be specific to ensure it is applicable to reality and SMEs would benefit.

To Hoai Nam, General Secretary of the Association of SMEs said that Vietnamese SMEs were struggling with land and credit access, technology, human resources, as well as market information.

In the first four months of this year, the number of firms halting operations rose 9 per cent compared to the same period last year to 27,000, which was alarming.

When the law is passed, drastic measures must be taken to ensure that the law works in practice and benefits SMEs.

There are around 500,000 firms in Viet Nam, 97 per cent of which are SMEs. — VNS