Agricultural SMEs struggle to raise capital

Despite having credit guarantees from the central bank, most agricultural enterprises in the country find it hard to access loans from commercial banks due to their lack of assets.

Vietnam has over 8,000 companies in the agriculture sector but up to 90% of them have capital of below 10 billion dong each, the Ministry of Agriculture and Rural Development said at a business forum in HCM City last week.

Nguyen Thai Hoc, chairman of the Vietnam Cashew Association (Vinacas), said there are 200 cashew processors and exporters in Vietnam but only 20 have export revenue of over US$50 million a year each. The remaining enterprises have an annual turnover of under US$10 million each.

“The cashew sector is facing difficulties of outdated processing technology and the lack of international quality standards. Enterprises need capital to expand production but fail to convince lenders due to the lack of assets for mortgage,” Hoc said.

The Government earlier asked the Bank for Investment and Development of Vietnam (BIDV) to give guarantees for small and medium enterprises (SMEs) to help them reach bank loans. But in fact, only three out of 20 banks in Vinh Long Province have provided loans to SMEs at a limited level, said Ho Van Vang, vice chairman of the provincial seafood association.

Truong Thanh Nghia, director of Tan Nghia animal feed enterprise in Long An, said the Government had not supervised implementation of the supporting policies.

Other enterprises suggested the Government give specific policies for different sectors such as cashew, coffee and seafood. Specific supporting policies will benefit not only enterprises but also farmers with high sale prices and improvement of living standards.

Deputy agriculture minister Diep Kinh Tan said the ministry would provide more assistance for SMEs soon, including a credit guarantee fund, vocational training programs and business development funds. – Saigon Times

Tags: Agricultural SMEs