The Ministry of Planning and Investment are drafting a law on support for the country’s SME sector and canvasing opinions prior to it being submitted to the government in July.
According to research done this year by the SME Management Science Institute, only some 30% of SMEs have been able to access loans from commercial banks. Difficulties in accessing capital causes another challenges to SMEs like such as patenting and trademark development, while they cannot afford to expand their market or improve human resource capacity.
"We still face difficulty accessing loans from commercial banks as a small company. For the most part, we have only ourselves to rely on", Nguyen Thi Hoang Yen - Director of Patent and Trademark Vietnam - spoke.
This is because the majority of SMEs lack collateral while banks remain reluctant to support SMEs. The new law on supporting small and medium enterprises is intended to resolve such problems. According to economists, the approach towards this draft law will create a more favourable environment to encourage investors and banks to provide suitable services to SMEs instead of directly supporting enterprises.
"Instead of providing subsidies or allowances to each SMEs, we should create stimulus policies or programmes to encourage commercial banks or investment firms to develop suitable services for SMEs. This means the state will create a favourable ecosystem for firms to support other firms", Pham Thi Thu Hang - General Secretary of Vietnam Chamber of Commerce and Industry - spoke.
Experts have also suggested that clarifying what tools are required to best support SMEs is necessary to ensure a better legal framework.
To ensure the law’s viability, many representatives from business associations stressed the importance of a monitoring mechanism on the law’s execution. The draft law is expected to be commented on at the second session of the National Assembly this October.
