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Vietnam Business » Vietnam Business News » Financial Support to SMEs Needed Flexible?

Financial Support to SMEs Needed Flexible?

The global economic crisis has pushed many Vietnamese enterprises, particularly small and medium-sized enterprises (SMEs) into challenges due to narrowed outlets. SMEs have made remarkable contributions to the national economy. The Vietnam Banking Times said SMEs contribute 30 per cent to the national annual GDP, own 32 per cent of the society’s total investment and create jobs for 90 per cent of the national labour force.

According to the statistics of the Small and Medium-sized Enterprises Association, enterprises that have a registered capital of over VND10 billion account for 13 per cent of the total SMEs. Due to their small size, they are hard to gain access to bank loans as banks often require SMEs to have 10 per cent equity and make use of all their assets. In addition, many SMEs have big debts. According to the association, around half of the SMEs have outstanding loans. However, an enterprise that has outstanding loans does not mean that it is weak as that loan may be resulted from big inventories due to narrowed market and high interest rates, which hinder SMEs from borrowing bank loans for their production.

Vietnam Business And Financial News Network. Source [vcci]

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