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SMEs struggle with accessing credits post-pandemic
Thursday,  10/29/2020, 18:42 

SMEs struggle with accessing credits post-pandemic

By V.Dung

Speakers at the seminar – PHOTO: THANH HOA

HCMC – Even though the Covid-19 pandemic has been brought under control in Vietnam, businesses are still struggling, especially since rescue packages have not been effective and the pandemic is still developing complicatedly elsewhere around the world, attendees were informed at a seminar on supporting small and medium enterprises (SMEs) organized by the Saigon Times Group today, October 29.

Data of the Business Registration Department under the Ministry of Planning and Investment indicated that there were nearly 40,000 businesses in Vietnam that had temporarily suspended operations between January and September, surging by some 80% compared with the same period last year. In HCMC alone, some 7,100 companies faced a temporary suspension in the first half of this year due to the impact of the Covid-19 pandemic.

Addressing the seminar, chairman of the HCMC Business Association Chu Tien Dung said the real number could be even higher as many businesses have withdrawn from the market quietly.

According to Dung, stimulation policies have not been effective as numerous businesses have not been able to access the Government’s rescue packages. 

Nguyen Hoang Minh, deputy director of the State Bank of Vietnam-HCMC branch, said credit institutions are the pioneers in supporting businesses affected by the pandemic. Over the past six months, they have supported over 248,000 clients.

“We have asked commercial banks not to refuse to provide capital to businesses that have efficient business plans from now until the end of this year,” Minh said.

Nguyen Thanh Nhan, corporate client manager at Viet Capital Bank, said commercial banks do not lack capital and they are always willing to provide capital for SMEs as long as they can prove their business plans are feasible and effective. To meet the credit growth target, Viet Capital Bank will give priority to SMEs and businesses active in the agriculture and essential goods sectors until the end of this year.

However, some businesses admitted they need to have collateral to borrow money from banks and find it hard to access the credit packages if they are not patrons of the banks.

Many SMEs said their demand for capital during the year-end season is high, not only for their production activities but also for the employees’ allowances. They proposed relaxing lending rules so they can have easier access to the credit packages.

In response, bank representatives said collateral is not a compulsory requirement and the relaxation of lending rules must be in line with bad debt control regulations.

Chu Tien Dung said not many SMEs are capable of coming up with an effective and detailed business plan to be eligible for the credit packages. Therefore, he suggested SMEs and commercial banks sit together to address these obstacles.

According to Nguyen Thanh Nhan, most SMEs are not familiar with digital transformation and online transactions, which are some of the barriers preventing them from accessing credit packages.

“We always encourage SMEs to use more online transactions and apply more digital technologies, which enable us to have a clearer insight into their cash flow. The faster they transform, the more easily they can access credit packages,” he said.

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