Opening a way for small and medium enterprises

Small and medium enterprises (SMEs), in order to develop well, need to solve the problems of capital and labour force shortage. There are about 500,000 enterprises in total, 97 percent of which are SMEs and make up to 40 percent of GDP.

Great potentials

TNS, a market survey firm, has released a new report stating that 72 percent of owners of SMEs believe their businesses will operate better in the future, which means that SMEs keep very optimistic about their business.

Jeff McLean, UPS Vietnam’s General Director, believe that SMEs will be able to develop strongly if they are given the right key to open the doors in doing business.

Tran Hoang Ngan, a well known economist from the HCM City Economics University, also said SMEs play a very important role in the national economy, which silently create jobs, generate essential consumer goods and build up supporting industries.

Even big economies with high development level such as Japan, the US or Western Europe also pay attention to develop SMEs, because SMEs and big enterprises can support each other in using the labour force, while SMEs can make the products which can not be made by big enterprises. According to a report released by ILO (International Labour Organisation), in every 10 years, some enterprises can grow up and turn into big enterprises which make greater contribution to the development of national economies.

Capital and labour force shortage are the biggest challenges

According to Cao Sy Kiem, Chairman of the SMEs Association, SMEs now face four biggest problems: the lack of capital, labour force, the limited capability to apply new technologies and to access information. Of the four problems, the lack of capital and workforce are the two biggest problems.

Commercial banks now still charge overly high interest rates on SMEs. Meanwhile, enterprises find it hard to access bank loans because they can not meet the requirements set by commercial banks in terms of procedures. Especially, SMEs do not have assets to be mortgaged at banks for getting loans

The TNS’ survey also showed that 61 percent of SMEs intend to cut down the workforce. Huynh Van Minh, Chairman of the HCM City Business Association, said the majority of SMEs do not have enough financial capability and working conditions to attract talents. That explains why most of workers at SMEs are untrained labourers. Therefore, he stressed, the most important thing that SMEs need to do now is training and updating knowledge for workers.

Two months ago, HCM City set up a research institute on the science of leadership and governance. The institute has attracted 1,000 learners who come from SMEs.

Kiem said that the State and government agencies need to make the legal framework transparent, assist SMEs to upgrade the quality of the workforce and help SMEs to expand markets. Besides, SMEs need the support from the State to set up workshop premises, increase capital, apply new technologies, train workers, promote trade and popularize their brands.

Recently, in a meeting with enterprises, the HCM City Credit Guarantee Fund and the city’s finance investment joint stock company gave promises to assist SMEs to access loans and financial sources in a more convenient way.-Nguoi lao dong

Tags: Vietnam companies, Vietnam enterprises, Vietnam SMEs