Vietnam's small, medium companies have limited access to credit

Small and medium-sized enterprises (SMEs) in Vietnam continue to grapple with limited access to credit even though they play an important role in the economy and account for 62 percent of total employment, according to Vietnam Chamber of Commerce and Industry (VCCI).

Only 30 percent of private SMEs in Vietnam have managed to secure bank loans, local VNExpress online newspaper quoted the latest data from VCCI as saying on Thursday.

Statistics also showed that the amount of credit provided to SMEs only accounted for three percent of all outstanding loans at local banks.

Although there are some banks that focus on SMEs, they really are not able to offer financing to early-stage companies which often do not have a track record of reliable annual revenues or a history of good credit, Rajeev Chalisgaonkar, global head of business banking at Standard Chartered, told a recent workshop.

Limited access to finance is a major constraint to the growth of private companies, besides other obstacles such as management or technological issues, said VCCI's Vice President Vo Tan Thanh.

The Ministry of Planning and Investment has proposed a series of initiatives to improve access to finance for small and medium-sized businesses. An estimated 550,000 SMEs will benefit, said VNExpress.

Vietnam's SMEs account for 97 percent of the country's total companies, some 50 percent of the gross domestic product (GDP) and 33 percent of the state budget revenue. Endit