Micro, small and medium enterprises businesses are defined as the engines of growth and innovation in the APEC region, alongside the two important areas of agriculture and innovative startups (Photo: ipsard.gov.vn) Hanoi (VNS/VNA) - More effortsshould be made to boost administrative reform in the banking system to furtherfacilitate access to credit for micro, small and medium enterprises.
This was the consensus at the conferencetitled “Reforming administrative procedures – improving credit access” held on April20 by the State Bank of Vietnam and the Chamber of Commerce and Industry(VCCI).
According to VCCI data, 97 percent of the500,000 enterprises operating in Vietnam are small and medium sized (SMEs). Ofthese, 85-90 percent is micro and small companies.
Bank capital has contributed significantlyto the development of the private economic sector, especially the SMEs. Thiswas demonstrated in the rapid improvements of both the overall businessenvironment and the credit ranking of the country.
Vietnam’s business climate ranked 68th outof 190 economies surveyed in the World Bank’s Doing Business Report 2018, ajump of 14 ranks against the previous year – a record improvement. Its GettingCredit Index was among the top 30 economies, with the 29th position.
VCCI Chairman Vu Tien Loc said that thebanking sector’s contributions to the economy are more than the numbers,particularly given that about 55 percent of medium- and long-term capital isbeing provided by bank credit.
At present, about 80 percent of credit ischanneled into the production sector while the capital supply for theBuilding-Operate-Transfer (BOT) tends to decline, Loc said. However, he pointedout that a number of enterprises have still found it difficult to access bankcredit.
“Some businesses told me that they havethousands of hectares of farmland for production, but bank regulations requirethe mortgage of workshops to get loans. This is not to the advantage ofagricultural enterprises,” Loc said.
In fact, this type of businesses is oftensmall-scale, lacks collateral assets and management experiences and isvulnerable to market changes, all of which make it difficult for them to gaincredit from banks.
“We need to change the method of givingcredit so that farmers can use their own land as the mortgage to get capital togrow their businesses. This is not the responsibility of the banking industry,but the Government,” Loc said.
Micro, small and medium enterprises, aswell as women-owned businesses, are defined as the engines of growth andinnovation in the APEC region, alongside agriculture and innovative startups,in which additional investment is urged.
One of the critical issues for theirdevelopment is financing, and the Government should improve credit access forthese targeted enterprises, especially reforming lending procedures for agriculturaland startup businesses, Lộc said.
Dao Minh Tu, Deputy Governor of the StateBank of Vietnam (SBV), said Vietnam has created a legal framework to build atruly equal credit relationship between banks and businesses. Banks have cutback a wide range of cumbersome procedures, as well as provided diversifiedproducts.
At present, SBV has built a big database oncredit information, which helps assess the performance of enterprises, theircreditworthiness and financial capability. Businesses also know the banks’information.-VNA
This was the consensus at the conferencetitled “Reforming administrative procedures – improving credit access” held on April20 by the State Bank of Vietnam and the Chamber of Commerce and Industry(VCCI).
According to VCCI data, 97 percent of the500,000 enterprises operating in Vietnam are small and medium sized (SMEs). Ofthese, 85-90 percent is micro and small companies.
Bank capital has contributed significantlyto the development of the private economic sector, especially the SMEs. Thiswas demonstrated in the rapid improvements of both the overall businessenvironment and the credit ranking of the country.
Vietnam’s business climate ranked 68th outof 190 economies surveyed in the World Bank’s Doing Business Report 2018, ajump of 14 ranks against the previous year – a record improvement. Its GettingCredit Index was among the top 30 economies, with the 29th position.
VCCI Chairman Vu Tien Loc said that thebanking sector’s contributions to the economy are more than the numbers,particularly given that about 55 percent of medium- and long-term capital isbeing provided by bank credit.
At present, about 80 percent of credit ischanneled into the production sector while the capital supply for theBuilding-Operate-Transfer (BOT) tends to decline, Loc said. However, he pointedout that a number of enterprises have still found it difficult to access bankcredit.
“Some businesses told me that they havethousands of hectares of farmland for production, but bank regulations requirethe mortgage of workshops to get loans. This is not to the advantage ofagricultural enterprises,” Loc said.
In fact, this type of businesses is oftensmall-scale, lacks collateral assets and management experiences and isvulnerable to market changes, all of which make it difficult for them to gaincredit from banks.
“We need to change the method of givingcredit so that farmers can use their own land as the mortgage to get capital togrow their businesses. This is not the responsibility of the banking industry,but the Government,” Loc said.
Micro, small and medium enterprises, aswell as women-owned businesses, are defined as the engines of growth andinnovation in the APEC region, alongside agriculture and innovative startups,in which additional investment is urged.
One of the critical issues for theirdevelopment is financing, and the Government should improve credit access forthese targeted enterprises, especially reforming lending procedures for agriculturaland startup businesses, Lộc said.
Dao Minh Tu, Deputy Governor of the StateBank of Vietnam (SBV), said Vietnam has created a legal framework to build atruly equal credit relationship between banks and businesses. Banks have cutback a wide range of cumbersome procedures, as well as provided diversifiedproducts.
At present, SBV has built a big database oncredit information, which helps assess the performance of enterprises, theircreditworthiness and financial capability. Businesses also know the banks’information.-VNA
VNA
