HANOI: Vietnam’s economy has shown remarkable resilience and growth in recent years, particularly in the realm of small and medium enterprises (SMEs).
Recognising the vital role these businesses play in driving economic development, the Vietnamese government and various organisations are increasingly focused on creating a comprehensive financial ecosystem tailored specifically for SMEs.
This initiative aims to enhance access to finance, promote innovation and ultimately foster sustainable growth.
SMEs constitute a significant portion of Vietnam’s economy, with approximately 40,000 enterprises and around five million individual business households, Trinh Thi Huong, Deputy Director of the Enterprise Development Agency (EDA) under the Finance Ministry, said at a conference on Wednesday.
According to the Finance Ministry, the private sector contributes about 51% of gross domestic product, over 30% of the state budget, approximately 82% of total employment and nearly 60% of social investment capital.
These enterprises are crucial for job creation, innovation and regional development.
Despite their importance, however, SMEs often face numerous challenges, particularly in accessing financial resources.
One of the most pressing issues for SMEs in Vietnam is the lack of access to affordable financing options.
Traditional banks often regard these businesses as high-risk due to factors such as insufficient collateral, lack of credit history and limited financial transparency.
As a result, about 98% of SMEs struggle to secure loans or are offered loans with exorbitant interest rates, which can stifle their growth potential.
Additionally, the financial literacy of SME owners varies widely, making it difficult for them to navigate the complexities of financing and investment.
Many entrepreneurs are unaware of the various financial products available to them, which further exacerbates their challenges in obtaining necessary funding.
To address these challenges, the Vietnamese government, in collaboration with financial institutions and business associations, is working to develop a comprehensive financial ecosystem for SMEs.
This ecosystem aims to create a more inclusive financial environment by improving access to funding, enhancing financial understanding and fostering innovation.
One of the primary goals of this initiative is to expand the range of financing options available to SMEs, said Le Thi Xuan Quynh from Department of Policy, Business Environment and International Cooperation under EDA. — Viet Nam News/ANN
