Small- and medium-sized enterprises (SMEs) are facing
challenges accessing capital and using it efficiently, said Doan Thi
Quyen from the Vietnam Chamber of Commerce and Industry (VCCI) at a conference in Hai Phong on Aug. 8.
The conference is aimed at helping SMEs access and efficiently manage capital including loans from commercial banks. Explanations as to why commercial banks are not giving SMEs priority over loans have also been tabled.
"Commercial banks themselves have to pay interest rates which are high at the moment," said AFC Institute of Financial Management CEO Dang Duc Son.
He added that commercial banks prefer to offer loans to large companies, corporations and State-run enterprises due to their solvent capacity. As a result, not many SMEs can seek financial help from banks.
VCCI Secretary-General Pham Thi Thu Hang said many SMEs did not know how to use and manage loans effectively due to their limited knowledge on up-to-date banking and financial policies and management.
She said that as a result, 40 percent of SMEs in Hai Phong had downsized while a further 11 percent have went out of business.
Quyen explained that SME sales during the first quarter had fell year-on-year, and at the same time, profits dropped due to high interest rates and inflation.
Experts at the conference offered solutions to help SMEs overcome these difficulties.
Do Thi Thu Huong, director of the Hai Phong branch of Bao Viet bank, said SMEs can easily access loans from the bank by using the overdraft facility which allow them to borrow large amounts of money at short notice.
She added that the bank also offers a service called centralised account management which helps SMEs to effectively manage their accounts.
"By using the service, SMEs can manage their accounts to ensure their agents operate efficiently," said Huong. [SMEs will be notified of their agents business status through the account
management system. Loss or profit data from agents accounts will be
automatically sent to SMEs main account, so SMEs will know how to deal with difficulties promptly].
Quyen said that the corporate bond market can also help. The success of the corporate bond market allow investment funds and groups to help SMEs develop.
She added that the State Bank of Vietnam (SBV) should develop forms of mortgage loans.
According to SBV monetary policy department director Nguyen Thi Hong, the central bank was making efforts to reduce interest rates to 13 percent or even 11 percent to assist SMEs.
"We have set interest rates reduction targets of 9 to 10 percent by the end of the year, and the SBV has ordered commercial banks to restructure SMEs' debts," said Hong.
"SMEs should set prudent and achievable monthly and quarterly targets," Son added.-VNA