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7,000 SMEs bankrupt amid global crisis
7,000 small and medium enterprises (SMEs) have reportedly dissolved, while other 3,000 businesses have halted production. Prior to that, the Vietnam SME Association predicted that 20% of SMEs have been on the verge of bankruptcy.
The figures were released by Deputy General Director of the General Department of Taxation (GDT) at the meeting with SMEs held in Hanoi on March 18, who quoted the Vietnam Chamber of Commerce and Industry’s report.
According to Huyen, SMEs account for a large proportion in the Vietnam’s business community, but SMEs prove to be the most fragile subjects, especially in the context of the economic downturn. SMEs have a limited capability in technology, corporate governance skill, lack capital, and the capability to access to markets. The problems have pushed the enterprises into massive difficulties.
According to the Ministry of Planning and Investment, Vietnam now has 349,309 enterprises which have registered their business with the total registered capital of up to VND1.4 trillon (US $84.1 billion). Of this amount, 95% are SMEs.
The report by the Vietnam SME Association on the impacts of the global economic recession released recently showed that 70% of SMEs have been in difficulties due to the recession, while 20% have been in a lot of difficulties.
The association warned that if the businesses cannot access bank loans, their situation will be worse, with 20% of businesses facing the danger of being dissolved or on the verge of bankruptcy.
Cao Sy Kiem, Chairman of the association, stressed that half of the 20% of businesses or 10% of businesses have either stopped operation, shifted to other business or may be dissolved in the future. These businesses have been facing difficulties for a long time, and their situation has become worse with the economic downturn.
The other 10% of businesses have been influenced by the high inflation, and they will be able to recover if the Government has reasonable policy to support them.
Analysts said that the figure of 7,000 SMEs dissolved proves to be not a fearful figure if compared to the report by the SME association and the number of businesses in Vietnam. Meanwhile, some experts said that the figure may have not reflected all the difficulties SMEs are facing.
Phuoc Ha
Vietnamnet
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