Small and medium-sized enterprises (SMEs) need a transparent business environment and fair competition rather than too much support that could end up being impractical, experts say.

There was general agreement on this issue at conferences held in Ha Noi and HCM City on Wednesday and Thursday respectively by the Viet Nam Chamber of Commerce and Industry (VCCI) and the Central Council of Viet Nam Business Associations.

The conferences aimed to gather feedback on a draft law on support for SMEs.

Several conference participants said that no matter what the scale, enterprises need to be treated fairly and protected against legal barriers like relatively limited access to preferential credit.

“SMEs need protection rather than support,” said Phan Dang Tuat of the Ministry of Industry and Trade, even suggesting that the name of the law should be changed to Protecting SMEs.

He also said that using the word “support” could affect businesses in implementing free trade agreements.

Furthermore, the supports mentioned in the draft law were too general and might be impractical given the Government’s budgetary constraints, with 97 per cent of the firms in the country calling under the SME category, Tuat said.

“It will be better if the Government creates a transparent business environment and equal access to bank credit, land and other infrastructure,” he said.

Truong Thanh Duc, with the firm Basico, said all incentives should be considered carefully because overdoing it could motivate firms to become slack and dependent.

“It is vital to have appropriate policies to encourage SMEs,” Duc said.

Other experts said the criteria for being an SMEs must be clarified to ensure policies benefit the right firms.

Nguyen Ngoc Tuan, President of Dong Nai Association of Importers and Exporters, said that administrative procedures must be further simplified, so that household businesses are encouraged to become enterprises.

Lawyer Hoang Van Son also said that studies must be carried out to identify difficulties faced by the SMEs, why they went bankrupt, etc., so that realistic and practical supports can be provided.

He noted that while there were a significant number of new firms established every year, the number that were dissolved or went bankrupt was also considerable.

According to the General Statistics Office, there are around 570,000 firms in operation nation-wide.

The Government has targeted the establishment of a million enterprises by 2020. - VNS