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Provinces urged to support small firms
Representative from provinces gathered at a conference here yesterday to discuss was to support small- and medium-d enterprises (SMEs) at the local level in the context of the global economic downturn.
Local policymakers were best-positioned to deeply understand their own development targets and needs on which to base suitable policies, said Deputy Minister of Planning and Investment Dang Huy Dong.
"So far, agencies responsible for supporting SMEs have not been effective in assisting these businesses, while central agencies have only focused on developing policies," Dong said.
Any additional support to SMEs needed to be evaluated to ensure that the capital would not merely flow back into the hands of larger firms, he added.
Sharing experiences in supporting SMEs, Miki Miyamoto, an expert from the Japan International Co-operation Agency (JICA), said SMEs accounted for 99.7 per cent of total businesses in Japan, employed 70 per cent of workers and contributed half of the country's added value.
Miyamoto said SMEs were a key factor of the economy, particularly in services, retail and construction, playing key roles in serving local economies and providing jobs. He said Japan had encouraged enterprises to improve their management to adapt to economic and social changes, and had established an SME support network to help these businesses.
Nguyen Hoang Minh, deputy director of the HCM City Department of Planning and Investment, said the number of SMEs in the city accounted for 26 per cent of the country's total.
"The city has established industrial zones, industrial clusters and high-tech zones for businesses and established a financial insurance fund to support SMEs," Minh said.
In addition, the city has accelerated administrative reforms, supporting SMEs in trade promotion efforts, providing market information, developing e-commerce and transitioning out of an agricultural economy. It has also targeted providing long-term interest-rate relief for businesses for up to seven years.
Luong Quoc Thai, deputy director of Vinh Phuc Department of Planning and Investment Department, said his province had established or planned 24 industrial zones and trade villages. It also established a credit guarantee fund for SMEs back in 2007 with capital of VND78 billion (US$3.71 million ).
Dong Thi Bich Chinh, deputy director of the central city of Da Nang's Department of Planning and Investment, said support to SMEs was only a legal framework but not a reality. Several businesses were seeing strong development, however, due to natural resources exploitation and foreign direct investment. Chinh said the Government needed to establish a national agency to support businesses.
The head of the ministry's Business Development Department, Ho Sy Hung, said they would complete the legal framework to support SMEs, assisting them to improve competitiveness and access to financial resources. Accordingly, it would establish an SMEs Development Fund and include policies to encourage commercial banks to lengthen and improve lending terms for SMEs, he said.
Some localities participating in the event voiced the need for more market information and urged the creation of an information network and a national trade promotion programme for SMEs. A survey by the Viet Nam Chamber of Commerce and Industry last year found that only about one-third of SMEs nationwide were able to access bank loans, and much of this was through Government preferential policies giving banks incentives to extend credit.
The Prime Minister has also issued a decision establishing loan guarantee funds for SMEs, but the survey of 2,000 businesses showed that nearly 80 per cent of businesses remained unfamiliar with these programmes. The country now has only 13 such funds in 63 cities and provinces, and many were ineffective due to limited local funding.
vietnamnews
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