HCM CITY (VNS) — The Japan Finance Corporation organised a conference in HCM City to apprise small and medium-sized Japanese enterprises about its letters of credit that enable firms to borrow locally and become financially independent of their parent companies.
Sachiko Hayakawa, managing director of JFC, said her corporation has 47,000 small and medium-sized enterprises as customers in Japan of whom more than 6,000 have overseas subsidiaries, 315 of them in Viet Nam.
It has in recent years been issuing stand-by letters of credit (SBLC) to guarantee Japanese SMEs' loans from local banks in seven countries – Viet Nam, Thailand, the Philippines, South Korea, Singapore, Indonesia, and Malaysia.
VietinBank is the only lender in Viet Nam to be selected as a partner, she said.
The bank is establishing a Japan desk and offering preferential interest rates for JFC's customers, she added.
Nguyen Tran Kien, a Vietinbank executive, said Japanese SMEs in Viet Nam introduced and guaranteed by JFC's LCs could get loans of up to VND110 billion (US$5.24 million) in dong or US dollars for buying equipment or long-term funding.
Another Vietinbank executive said the common problems of Japanese subsidiaries in Viet Nam include the inability to predict exchange-rate fluctuations and the resultant losses and to borrow from local banks.
But their parent companies in Japan urge them to manage independently, she said.
Tomohiko Sato, managing director of Sato Sangyo Vietnam Co. Ltd, a company making household appliances in Binh Duong Province, said SBLCs could help his company become independent of its parent company.
Many Japanese SMEs in Viet Nam are profitable. According to a survey by the JFC, almost 52 per cent made profits last year and 11 per cent broke even.
The conference also discussed how Japanese SMEs in Viet Nam can reduce employee turnover and have a stable workforce.
Le Long Son, director of Esuhai Co.Ltd – which offers training and job consultancy for Japanese SMEs – said Vietnamese tend to "leave the heart at home and bring only their head to work" in reference to the importance of family.
Firms need to bring "company" and "work" into worker's consciousness to change things, he said.
Most workers are unhappy to travel long distances to work and tend to keep switching jobs until 26, and the firms can only attract and keep good workers by paying high salaries and offering good career prospects, he said.
Besides, personnel should be recruited and trained only at 26-27, he added.
The conference was jointly organised by the VietinBank and the Japan External Trade Organisation. — VNS