Higher coverage helps SMEs recover faster

The Law on Support for Small- and Medium-sized Enterprises (SME) took effect on January 1, 2018, but its programmes have not provided adequate coverage to make any big difference.

According to the Việt Nam Chamber of Commerce and Industry (VCCI), ten programmes have been implemented under the law, but fewer than eight per cent of enterprises enjoyed the benefits from the programmes.

Notably, only 7.34 per cent got access to the SME Credit Guarantee Fund, 6.55 per cent got the consultancies from state agencies, and 4.75 got the subsidies for rentals in industrial parks, high-tech parks and industrial complexes.

Regarding other subsidies, just 6.17 per cent were granted legal aid services subsidies, 5.40 per cent market information consultancy subsides, 6.83 per cent training courses subsidies and 5.39 per cent vocational training subsidies.

Although 80 per cent of enterprises which managed to access the programmes said procedures were easy to follow, the figure does not capture those who never applied. In fact, 51.3 per cent were unaware of the programmes.

"On the bright side, over 80 per cent of firms that accessed the relief programmes said eligibility procedures were easy to complete. However, one note of caution is that only firms completing the entire procedures gave these assessments," said Đậu Anh Tuấn, Deputy Secretary-General of the VCCI.

The law's low coverage has led to policy ineffectiveness and left many struggling enterprises in the lurch.

Given nearly 35,700 enterprises had to temporarily cease their operation and 11,300 awaited dissolution in Q1/2022, the VCCI urged the authorities to step up the programmes to expand their coverage, helping more SMEs back on their feet.

SMEs account for 98 per cent of enterprises in Việt Nam, 45 per cent of the country's GDP and 31 per cent of the State Budget, with over 5 million workers on the payroll.

The pandemic and the Russian military operations in Ukraine have put many SMEs at risk. They are struggling to keep afloat, are not so optimistic about the long-term, and are in urgent need of support, according to the VCCI.