|Experts have urged the government to set up a centre for credit services for struggling small- and medium-sized enterprises (SMEs). — Photo tamnhin
HCM CITY (VNS) — Experts have urged the government to set up a centre for credit services for struggling small- and medium-sized enterprises (SMEs).
The number of enterprises that have suspended or closed operations in the first seven months of the year was 37,612, an increase of 9.8 per cent year-on-year. Most of the companies that closed were SMEs, according to the General Statistics Office.
The number of newly established enterprises totalled 42,398, with total registered capital of VND262.4 trillion (US$12.5 billion), down 7 per cent and up 17.8 per cent in capital, compared to the same period last year.
Analysts said many companies were still mired in hardship, resulting in an increase in bankruptcies and dissolved firms.
For many of them, sales have declined, which has made it more difficult to access capital, even though lending rates have dropped to 2005 and 2006 levels.
Meanwhile, aggregate demand remains weak and though the central bank has cut lending rates to help businesses access loans, the economy is still not absorbing enough capital, they said.
Vietinbank general director Le Duc Tho said: "Only about 30 per cent of SMEs have access to bank loans, and the remaining 70 per cent have to depend on their own sources of capital (internal financing) or loans not from the banking sector, which often have very high interest rates."
Tho said that bad debts, weak competitiveness, non-transparent financial reports and lack of assets that could be used as collateral were preventing SMEs from accessing capital sources, including bank loans.
"For banks, most of them still hesitate to lend to SMEs because they are afraid of risks, so they have set strict lending criteria that SMEs cannot accept," he told Dau tu Chung khoan (Securities Investment).
"Consumers have been tightening their belts, which has also caused a reduction in sales for businesses," he added.
To help SMEs overcome development obstacles, analysts have stressed the need to have close cooperation between the Government, the banking sector and SMEs.
They suggested that the Government develop support policies to meet requirements of SMEs, and involve various industries in the effort.
They said the Government should set up a market information system to help SMEs outline effective sales and production plans, and build trade and brand-name promotions suitable to SMEs' financial abilities.
Vu Dinh Anh, senior economic expert, has called for creating capital channels designated for SMEs only. This would help them easily access loans at reasonable interest rates.
"Establishing a centre of credit services is also necessary. The centre would act as a ‘bridge' between SMEs and credit institutions. In particular, it would be responsible for providing SMEs with information on the banks'credit programmes, helping SMEs complete capital lending documents, and connecting SMEs with the Credit Guarantee Fund," he said.
"The central bank should also issue policies to encourage commercial banks, such as reducing the compulsory-reserve ratio and refinancing interest rates so as they can set aside preferential capital packages to lend to SMEs. Top priorities should be given to the lenders that have a high proportion of outstanding loans to SMEs," Tho of VietinBank said.
"The central bank should also help banks develop sources of capital for SME development, and support banks with long-term capital sources at reasonable interest rates in order that the latter would have more financial conditions to lend to SMEs," he said. — VNS