VietinBank Quảng Nam branch. Getting access to funding remains a big concern for start-ups and SMEs in Vietnam (Photo: VNA)
HCM City(VNA) - Executives from startups and small and medium-sized enterprises participatedin a conference titled “Access to capital for startups” in HCM City onSeptember 21.
According to Ho Trong Lai, Chairman of strategy consultancy Heaven Light, SMEsand startups find it hard to access capital because they do not haveinformation about the sources of funding, do not know how to go aboutsoliciting funding from investors and lack the salesmanship needed to selltheir ideas to investors.
Many entrepreneurs complain that they do not know where to go to look forcapital or how to meet with investors.
Lai said it is like a student coming and asking where they can getscholarships.
“You have to do your homework first. Nowadays there are a lot of organisationswho can help you with the information; you can find them online very easily.
“You can just Google everything. It is not difficult or technical.”
To raise capital, entrepreneurs must at least know how to make a businessproposal like a graduate looking for job must know how to make a CV, he said.
Funds are now available more than ever before, and the problem is how astart-up entrepreneur can make a pitch that investors want to listen to and theninvest, he said.
Phan Dinh Tue, Vice President of Sacombank, said his bank does not have aspecial policy or loan package for startups, but instead treats them as smalland medium-sized businesses.
The requirements for startups and micro businesses to get a loan are alsostrict, he said.
However, while big companies must submit their full financial statements forthree years, banks are more flexible with startups and newly established smallfirms.
“A startup just established for six months, how they can possibly have afinancial report?”
According to Tue, Sacombank has 100,000 business customers, 83 percent of themSMEs.
This year it earmarked 3 trillion VND for SMEs at 2 percent lower interest thannormal and has disbursed 1 trillion VND so far, he said.
VPBank also lends to startups and SMEs.
Nguyen Thanh Binh, SME Division Director of VPBank’s Phu My Hung SME Centre,said in the last three years the bank has been offering unsecured loans tosmall firms and start-ups that have been in business for at least six months.
VPBank has lent to 40,000 businesses, and its loans outstanding are now worth 5trillion VND, he said.
He said to get a loan, SMEs and startups must meet certain criteria: the ownermust have at least three years’ business experience and the company must have agood credit history.
But he said the most important factor is that it must be a going concern.
Businesses less than six months old can also get loans but not large sums, hesaid.
However, the interest rate cannot be too low because lending to SMEs is veryrisky, he said.-VNA
VNA
