SMEs need more support: VCCI

The Viet Nam Chamber of Industry and Commerce (VCCI) has requested the Government to consider introducing several macro-economic policies to help all businesses and small and medium-sized enterprises (SMEs) in particular overcome difficulties.

At a meeting held by the chamber in Ha Noi yesterday, Nguyen Thi Thu Hang, director of the organisation’s Enterprise Development Institute, asked the State to create capital resources by slashing public investment projects.

She also asked for interest-rate support packages for SMEs. Interest rates should stay at less than 12 per cent per year, she said, adding that the establishment of a SME support fund would help.

Also, a credit rating system should be developed to help commercial banks quickly appraise and approve loans for SMEs.

Hang said that the central bank should continue limiting loans to the non-productive sector. However, projects on building or developing industrial complexes and offices for lease by SMEs should be counted as productive.

On behalf of the Vietnamese businesses community, she suggested that the Government should introduce strategies to lure foreign direct investment from value-added sectors, Hang said, adding that co-operation among domestic and foreign enterprises would sharpen the economy’s competitive edge.

Representatives from associations said SMEs and exporters who used domestic input materials and were involved in support industries should be given priority regarding capital and technology.

Nguyen Ton Quyen, vice chairman of the Viet Nam Timber and Timber Products Association, said the sector aimed to reach an export turnover of US$4 billion this year.

However, members of the association were facing many difficulties because they had to import materials from abroad while the United States and the European Union placed stringent standards on imported timber materials.

Although the sector needed to borrow about $1 billion in loans from banks and credit institutions to import input materials, most members of the association have found it hard to access banks loans due to their small size, Quyen said.

He also requested the electricity sector to give notice of power cuts so that enterprises could adjust their production schedules.

Many SMEs expressed concern about high interest rates, saying they had adversely affected their operations.

According to a new survey conducted by the VCCI on 360 businesses and 34 business associations nationwide, about 62 per cent conceded that production costs had increased significantly and 44 per cent reported declining profits on each product unit.

The survey showed that as of April this year, about 44 per cent of businesses were borrowing from banks at interest rates of more than 18 per cent per year.

At the beginning of last month, some enterprises encountered higher interest rates, from 20 per cent to 27 per cent per year.

According to the Ministry of Planning and Investment (MPI), up to the end of last year, about 544,394 enterprises were registered under the Law on Enterprises. During the first half of the year, more 39,500 new businesses were added with a total registered capital of VND230.2 trillion ($11.2 billion).

Although the number of new enterprises had been increasing in recent years, the number of surviving businesses was fewer, the ministry asserted. The ministry also said that stockpiles of industrial products were challenging businesses and the industrial sector. — VNS

Tags: Vietnam companies, Vietnam enterprises, Vietnam SMEs