Thursday, November 23 2017

VietNamNews

SMEs need support to compete globally

Update: March, 12/2015 - 09:21
Statistics showed that the average profitability ratio of SMEs in HCM City is just 1.8 per cent in comparison with the figure of 6.9 per cent in the industry sector. — Photo doanhnhansaigon
HA NOI (VNS)  — Small and medium-sized enterprises (SMEs) in the support industry need better support policies to enhance competitiveness and participate in the global value chain, experts stated.

They added that the profit margins of SMEs remain modest.

Statistics showed that the average profitability ratio of SMEs in HCM City is just 1.8 per cent in comparison with the figure of 6.9 per cent in the industry sector; reflecting that SMEs are struggling and the Government's support policies are not working as expected.

According to Huynh Van Minh, chairman of the HCM City Business Association, SMEs are encountering complicated administrative procedures and have difficulty accessing credit.

He said that although the city has policies for providing capital support to SMEs, they remain worried about the fluctuations in interest rates, urging for more appropriate and stable interest rates to encourage investments.

Last year's figures from the Viet Nam Association of SMEs showed that only 32 per cent of SMEs nationwide have access to credit.

In addition, there is a shortage of information for SMEs involved in the integration process, which confuses companies and keeps them from grasping any opportunity.

Hang Vay Chi, chairman of Viet Huong Joint Stock Company, said a support fund should be set up to provide preferential loans to SMEs.

Besides difficult capital access, SMEs in the support industry have also failed to keep pace with technological advances and their poor competitiveness will fail them in the race with foreign countries, according to Huynh Thanh Dien from HCM City Economics University.

Experts also demanded that support policies on land and infrastructure should be formulated.

There are around 500,000 SMEs in Viet Nam, making up for more than 90 per cent of the total number of companies throughout the country. — VNS

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