This company produces safety shoes for export to Korea. The company received orders of about 200 thousand pairs its first year, when it started 5 years ago. As of 2015, the annual figure has increased to over 1 million pairs. Despite its success, the company has trouble accessing credit to expand production.
According to the Vietnam Association of Small and Medium-sized Enterprises, only 35% of SMEs can access credit. Others have not met credit requirements set by banks to get loans.
To Hoai Nam, Vice Chairman, Vietnam Association of Small & Medium-sized Enterprises said: Many SMEs do not meet all of a bank’s criteria, such as having a business plan, collateral, or transparent financial statements. Meanwhile, banks still want to give loans, especially commercial banks.
Less capital means expansion is slow, especially into foreign markets. To help SMEs access credit more easily, the ADB has been working with 11 banks in Vietnam. As of 2015, nearly 3,000 transactions by SMEs have received support from the programme, which provided 739 million USD from 2012 - 2015.
"We work with banks in Vietnam to provide guarantees and loans for necessary trade. It’s about closing market gaps especially for small and medium-sized enterprises", said Steven Beack, Head, Trade Finance, ADB.
SMEs contribute over 40% to total GDP of the country. Therefore, accessing credit is necessary for developing both businesses and the economy.
