Mushroom production at Highland Mushroom Company Ltd. Thanks to the timely support of SHB and ADB, the company has grown by 30-40 per cent in terms of human resources and sales. — Photo courtesy of SHB

HÀ NỘI — Women-led small and medium-sized enterprises (SMEs) play an increasingly important role in the economy. However, in reality, these enterprises are having difficulty accessing capital.

According to the Ministry of Planning and Investment, only 25 per cent of SMEs have access to official finance. Most of them have to seek loans from other sources such as friends, family, and non-bank loans.

Access to official capital has been difficult because the financial capacity of business owners is not high, reflected in cash flow management, document transparency and financial statements. At the same time, most businesses have not met the conditions for bank loans due to collateral issues, feasible business plans, repayment history and other loan conditions and procedures.

Nguyễn Thị Chi Phương, Director of the GHP General Business Company Limited said that at the beginning of 2022, the company won a bid for land clearance of Liên Hà Thái Industrial Park (the first and key IP in Thái Bình Province’s economic zone). However, they did not have enough working capital to implement the project.

“Banks often have many requirements for collateral while loan procedures are quite complicated,” Phương added.

Many firms also said that cumbersome loan procedures would increase transaction costs because of the time, paperwork and travel required to get a loan.

Women-led enterprises often face more difficulties such as prejudices about women's limited understanding of business. In addition, banks lack awareness about the businesses’ market potential.

The Government, the banking industry and international organisations have created an open, equal and transparent business environment to resolve the inadequacies that women-led businesses are facing. They have concretised policies, plans and programmes to support women-led enterprises.

The support programme to reduce the impact of the COVID-19 pandemic for women-led SMEs has been implemented by the Asian Development Bank (ADB) in collaboration with five Vietnamese banks since 2021 with a budget of US$5 million. By the end of 2022, SHB took the lead among the five banks participating in the project with a total amount of non-refundable aid of $1.7 million from ADB to directly support SHB's customers.

SHB has rescheduled repayment terms for existing women-led businesses that are facing difficulties due to COVID-19, providing support for up to 6 months of interest rate for new customers. The bank has also exempted all related fees for the firms. The total support value was up to $10,000, deducted from ADB's funding. In addition, to create business leverage for new women-led businesses, on behalf of customers, ADB pays a commitment fee to withdraw capital up to 8 per cent of the total loan value.

Trần Ngọc Diễm Thuần, Director of Highland Mushroom Company Ltd in the Central Highlands province of Đắk Lắk. — Photo courtesy of SHB

Operating in the agriculture industry, Trần Ngọc Diễm Thuần, Director of Highland Mushroom Company Ltd in the Central Highlands province of Đắk Lắk specialising in mushroom production said her firm suffered serious effects from the pandemic, causing a halt in production and low consumption. They had to face a shortage of working capital, making it difficult for their operation.

After accessing the SHB and ADB’s programme, the company was supplemented with capital to reproduce and stabilise business operations. “Thanks to the timely support of SHB and ADB, the company has grown by 30-40 per cent in terms of human resources as well as product sales. In addition to funding support, we also participate in an online training programme on modern business management skills, from which we can learn and apply to run the company better,” she added.

After a long time of struggling to find bank capital, in mid-2022, GHP Company was disbursed by SHB, promptly implementing the project that had won the previous bid.

“Fortunately, when we were struggling with a lack of capital, we were supported by SHB in a timely manner. Thanks to the bank's capital and incentives, our cost burden was reduced. Previously, we could only participate in small projects, but with SHB's capital, the company was able to participate in larger projects,” Chi Phương said.

“That support is very valuable, especially in the context that we are facing many difficulties.”

Women-led enterprises currently account for nearly 30 per cent of the total number of firms in the country, creating jobs for millions of workers. They have strong points such as a flexible business leadership style that is more resilient in the face of difficulties, often paying attention to policies for employees and contributing to society. Empowering women to be economic masters both promotes gender equality and is a driving force for the sustainable development of businesses and the economy, promoting creativity, and strengths as well as enhancing competitiveness for enterprises.

In order to empower women-led businesses, the banking industry will continue to effectively implement a series of policies to support them to access capital, design specialised products, strengthen many non-financial solutions to help them recover production and business towards sustainable development.