SMEs Given Access to Capital Sources

Vietnamese small and medium-sized enterprises (SMEs) will have opportunities to approach financial sources for business expansion in the coming time, thanks to an assistance programme of the International Financial Corporation’s Mekong Private Sector Development Facility (IFC-MPDF).

 

An investigation into financial and commercial fields conducted by IFC-MPDF showed that SMEs, while accounting for 95 per cent of the business community, lack financial services. “The survey showed that products of commercial banks are targeted at big companies. Banks mainly provide loans on an assets mortgage basis; hence, enterprises with limited fixed valuable assets to mortgage face many difficulties borrowing money,” Ms Margarete Biallas, Director of Financial Market Development Division, IFC-MPDF, said.

 

To assist SMEs to borrow capital for expansion, IFC-MPDF has started a consulting project to assist commercial financial institutions in Vietnam in the next five years. The project will provide consulting services worth more than US$6 million for several banks and non-bank financial organisations like micro-finance organisations, insurance companies and finance leasing companies, to help them increase services for SMEs, super SMEs, as well as individual consumers.

 

Although methods of approach may vary, depending on the requirements of different banks, IFC assistance will mainly focus on developing marketing strategies for SMEs, related products/services including mobile phone banking service, risk management improvement and loan portfolio management.

 

IFC will also cooperate with the State Bank of Vietnam and the banking community to establish a personal credit information centre and collaborate with the Ministry of Justice to set up a network technology-based security transaction registering system. This project will allow Vietnamese banks to give more loans and spend less on property mortgage.