Small and medium - sized enterprises struggle to access banking credits (Source: VNA) Hanoi (VNA) - Smalland medium-sized enterprises (SMEs) must improve their transparency to enablethem to access banking credits, experts said at a conference on October 5.
The conference was jointlyheld by the Vietnam Chamber of Commerce and Industry (VCCI) and the State Bankof Vietnam (SBV) to discuss credit boosts for SMEs facing long-standingdifficulties in accessing loans.
According to banking andfinancial expert Can Van Luc, most SMEs have low management capacity andoutdated technology, they lack transparency in information and feasiblebusiness plans, and do not have adequate assets for mortgages, making themineligible for banking loans.
Credit institutions arehesitant to lend SMEs money for the same reasons. Luc noted that these problemswere compounded by complex banking procedures and a shortage of appropriateloan packages for SMEs.
Mac Quoc Anh, Vice Chairmanof the Hanoi SME Association, said the efficiency of SMEs is low. “Giventhe increasingly harsh international competition, points which are oftenregarded as advantages of SMEs, such as flexibility and low operation costs, areno longer advantages,” Anh said.
Hoang Thi Hong, Director ofSME Development Fund under the Ministry of Planning and Investment, saidimproving transparency of SME information was an important solution to enable SMEsto access credit.
“It is necessary to developa database about SMEs for credit institutions to use in evaluating lendingdecisions,” Hong said, adding that the database should include informationabout total assets, equity capital, revenue, profit and operations.
Also needed is a creditmarket for SMEs, with appropriate lending packages based on demand, Hong said.She added that lending should be provided for a group of SMEs which join witheach other in a production chain.
In addition, capitalraising channels should be diversified, rather than largely dependent on banks,for instance raising capital from the securities market, Hong said.
According to Nguyen Quoc Hung,director of the central bank’s Credit Department, SMEs are a driver of thenational economy and are among the priorities for banking credits.
Lam Van Chieu, deputydirector of Cuong Tan Company which produces rice variety, said that banksshould increase trust-based lending, based on the efficiency of firms.
Tran Quoc Toan from the ToanXuan Company said that reasonable interest rates should be provided for SMEs toencourage their investments and expansions.
Closing the conference, DaoMinh Tu, Deputy Governor of the State Bank of Vietnam, said: “If economic conditionsallow, the central bank will continue to cut rates.”
SMEs account for 97 percentof the total number of firms in Vietnam, contributed about 45 percent of grossdomestic product, 31 percent of the budget revenue and create five million jobs.-VNA
VNA
