SME law must meet business expectations

July 12, 2016 - 03:00

Policy-makers yesterday were called on to build the law on supporting small- and medium-sized enterprises (SMEs) in a way that helps narrow the gap between policies and expectations of businesses.

Concrete poles are produced at the Bắc Kạn Construction and Concrete Joint Stock Company in the northern mountainous province of Bắc Kạn. Local firms expect the law supporting SMEs will meet their expectations when it comes into effect. - VNA/ VNS Photo Danh Lam
Viet Nam News

HÀ NỘI – Policy-makers yesterday were called on to build the law on supporting small- and medium-sized enterprises (SMEs) in a way that helps narrow the gap between policies and expectations of businesses.

This opinion was voiced at the conference themed “Draft law on supporting small- and medium-sized enterprises from the enterprise community’s perspective” which was jointly held by the Việt Nam Chamber of Commerce and Industry (VCCI) and the Ministry of Planning and Investment (MPI).

Deputy Minister of Planning and Investment Đặng Huy Đông said the role of SMEs had for long been recognised as a backbone of most of the economies around the world.

Despite the government’s effort to create a fair and business-friendly environment for local SMEs, there was still a gap between policies and their implementation in practice as well as between policies and businesses’ expectations, Đông said.

According to Đông, the number of SMEs that go bankrupt or have to temporarily stop operating has been on the rise, while most of the enterprises spent very little on technology applications.

He stressed the need to thoroughly study the contents of the bill for the early adoption in order to provide timely support for the development of SMEs.

Nguyễn Hoa Cương, deputy director of the MPI’s Enterprise Development Department, said the five-chapter and 33-article bill introduced a number of support incentives for SMEs, particularly in terms of access to funding and technology, securing land for operations, information update and consultancy.

VCCI Secretary General Phạm Thị Thu Hằng said it was vital to ensure that the support policies were practical and suitable to domestic SMEs who are still struggling to compete with their foreign rivals.

The bill needed more feedback and recommendations from experts and businesses and should be reviewed with reference to international experience, she suggested.

The law itself was not enough, but authorities and State officials must change their mind-set and the way they work with enterprises, she added.

Agreeing with Hằng, director of the Economica Consulting Company, Lê Duy Bình suggested that Việt Nam should learn from Japan’s experience.

He said that since 1963 the country had issued many laws to support SMEs which were regarded as a growth engine of the economy. These policies focussed on encouraging the creativity of enterprises and start-ups, improving the management capacity of SMEs, enhancing productivity and facilitate the companies’ adaptability to economic fluctuations.

Thanks to timely and properly issued policies, Japan had seen the growth of many giant groups, Bình stressed.

Bình said that the government’s target to have one million enterprises by 2020 was feasible, citing that from 2005 to 2013, 600,000 enterprises were registered.

However, in reality, only 45 per cent of the companies actually operated during the period. This showed a big gap between business registration and actual operations, and therefore, the law must aim at narrowing the gap, Bình said.

VCCI chairman Vũ Tiến Lộc said that the law on supporting SMEs, if passed, would be a legal framework for the development of such group of enterprises, thus it must meet the expectations of enterprises in terms of cutting unnecessary costs, streamlining administrative procedures and easily accessing to supportive loans.

Lộc also suggested that the law regulate all banks to have programmes to assist SMEs, not just the few banks that were doing so currently. – VNS