VCCI Chairman Vu Tien Loc: Loans need to be developed specifically for the sector

VCN- After 30 years of innovation, although Vietnam is ranked 29/190 countries in terms of access to credit, up to now, 60% of small and medium enterprises (SMEs) ) have not accessed capital yet. According to the Vietnam Chamber of Commerce and Industry (VCCI) Chairman Vu Tien Loc, the reason is because of the "three factors”, and wants to remove the knot of the "three".
vcci chairman vu tien loc loans need to be developed specifically for the sector
President of the Chamber of Commerce and Industry of Vietnam (VCCI) Vu Tien Loc.

In your opinion, why are SMEs facing difficulties in accessing capital?

The responsibility lies with both "the three": the state (represented by the State Bank, relevant ministries), banks and financial institutions, and small and medium enterprises. Specifically, on the State side, there are still many legal frameworks that do not really encourage investment. On the side of banks and financial institutions, they are still listless. On the corporate side, the biggest weakness is the lack of transparency in governance where credit institutions cannot have confidence in the business.

Our country has about 670,000 operating enterprises. Of which, SMEs account for about 97%, contributing about 45% of GDP, 31% of total budget revenue and attracting more than 5 million workers. Despite the large contribution, the proportion of SMEs accessing healthy capital is not high.

What is the solution here, sir?

Responsibility belongs to the "three factors", so the solution is also the expansion of the "three factors", The essence of the problem is that the "three factors" need to sit together. The parties need to improve relations, not just the mechanism of application, but must be the symbiosis between banks - enterprises, funds - businesses. Thus, institutional bottlenecks, credit knots and bottlenecks in corporate governance are removed.

vcci chairman vu tien loc loans need to be developed specifically for the sector
Banks must take risks when lending to encourage creativity. Source: Internet.

In my opinion, it is necessary to overcome the shortcomings in which the State needs to reform vigorously on the policy and legal framework, create conditions for lending in the 4.0 era, promote start-ups. At the same time, there is a policy to promote interaction between enterprises and financial institutions. These policies will give businesses more space to grow, to access capital.

On the banks side, more efforts should be made in introducing new lending methods, strong investment-driven lending packages for start-ups and agriculture based on business ideas and business plan. Loans must be flexible, even supportive for startups.

At present, some banks have introduced new product packages, new lending methods that do not rely on collateral, apply information to minimize procedures... Specifically, banks should be directed towards accepting mortgage assets for the business plans and business ideas. And especially, there is a need to encourage supply chain lending.

For example, a bank can lend money based on the crops and livestock of farmers in their own fields. That is based on the business plan, but if the basis is for a factory, it will be difficult for investment in agriculture. In many developed countries, this form has long been used to promote entrepreneurship, stimulating creativity. And in particular, banks must take risks when lending to encourage creativity. This depends on state policy, within the framework of the banking system.

In addition, financial credit institutions, insurance companies need to interact, cover in the direction of supporting SMEs. It is necessary to develop loan packages according to the specificity of the industry, which is also a positive direction for pioneering in the coming time.

The banks will not only be a lender, but will also be a companion to a business, giving information support, training and consultancy on market information and corporate governance. Banks are very advantageous in this because the bank through its operations, will grasp the financial flow of the business.

The reason banks say "no" to a business is because the business lacks transparency in governance, since credit is the belief. Without transparency, trust will be difficult to achieve. Thus, businesses themselves must improve transparency, and give disclosure of information.

Thank you Sir!

By Xuân Thảo/ Huu Tuc

Related News

Make good use of e-commerce data, create effective tax and customs management

Make good use of e-commerce data, create effective tax and customs management

VCN - According to Mr. Pham Tan Cong, Chairman of the Vietnam Confederation of Commerce and Industry (VCCI), making good use of e-commerce data can help manage import and export work very well, bringing high efficiency for tax and customs management.
"The key" to promote growth for businesses

"The key" to promote growth for businesses

VCN - An unlocking growth driver is an urgent requirement from the Government to help businesses and the economy quickly recover. But unlocking the driving forces must be accompanied by drastic reforms in institutions and the business environment to create conditions and increase confidence for businesses to step forward.
Open export markets

Open export markets

VCN - In 2024, the Government targets export growth of at least 6% compared to 2023 in the context that the market situation is forecast to remain difficult. To achieve the goal, diversifying the market and expanding the market is the method that has been chosen by many businesses.
Supporting businesses in cost reduction

Supporting businesses in cost reduction

VCN - To continue enhancing the competitiveness of the business environment and supporting business development, Dau Anh Tuan (photo), Deputy secretary general, Head of the Legal department, Vietnam Chamber of Commerce and Industry (VCCI), suggested focusing on solutions to reduce business costs and making further efforts in improving the quality of legal regulations and law enforcement.

Latest News

New opportunities for Vietnam-Russia trade

New opportunities for Vietnam-Russia trade

The upcoming official visit to Vietnam by Russian President Vladimir Vladimirovich Putin is expected to open up new opportunities in bilateral relations, aiming towards the prosperous development for both sides.
MoIT launches anti-dumping probe into galvanised steel originating from China, RoK

MoIT launches anti-dumping probe into galvanised steel originating from China, RoK

The Ministry of Industry and Trade (MoIT) has requested an investigation and application of anti-dumping measures against some galvanised steel products originated from China and the Republic of Korea (RoK).
Greenovation forum for businesses to be held later this month

Greenovation forum for businesses to be held later this month

Given the rising demand for sustainable development and the associated business opportunities, the Vietnam Independent Directors Association (VNIDA) will host a forum for companies to demonstrate their commitment to both economic interests and environmental responsibility in Ho Chi Minh City on June 26.
Quang Ninh aims to attract 3 billion USD worth of FDI this year

Quang Ninh aims to attract 3 billion USD worth of FDI this year

Northern Quang Ninh province has attracted more than 1.52 billion USD worth of foreign direct investment (FDI) in the first half of this year and is poised to reach its goal of 3 billion USD in FDI for the full year.

More News

Import-export businesses reduce costs thanks to the customs clearance location at Thanh Phuoc Port

Import-export businesses reduce costs thanks to the customs clearance location at Thanh Phuoc Port

VCN - As the first dry port of Binh Duong province to be announced, Thanh Phuoc Port has just been recognized by the Ministry of Finance as a Customs Clearance Site, which is expected to promote the transportation of goods by waterway, to save logistics costs for businesses.
Cashew exports are struggling because of being on passive in raw material sources

Cashew exports are struggling because of being on passive in raw material sources

VCN - For each container of exported cashew kernels, enterprises lose hundreds of millions of dong when they have to import raw materials at high prices, while export prices are not adjusted to increase accordingly.
Quang Ninh strives to become northern region’s marine aquaculture hub

Quang Ninh strives to become northern region’s marine aquaculture hub

The northeastern province of Quang Ninh aims to become a fisheries hub in the northern region by 2030.
Bac Giang lychees promoted in Thailand

Bac Giang lychees promoted in Thailand

Fresh lychees from Luc Ngan district, the northern province of Bac Giang, continue to be sold at the supermarket chain of Gourmet Market and shopping malls belonging to Thailand’s The Mall Group this year.
Quảng Ninh posts fourth fastest growth in Red River Delta

Quảng Ninh posts fourth fastest growth in Red River Delta

The gross regional domestic product (GRDP) in the northern province of Quảng Ninh expanded at an estimated 9.02% year on year during the first half of 2024, ranking fourth in the Red River Delta and eighth nationwide.
New decree to set stage for innovative start-up economy

New decree to set stage for innovative start-up economy

The development of a separate decree on innovation and innovative start-ups is underway with an aim to leverage innovative start-up firms to a new height.
Early US recognition of market economy to increase opportunities for Vietnamese exports

Early US recognition of market economy to increase opportunities for Vietnamese exports

The US's recognition of the market economy in Vietnam will help expand business opportunities for Vietnamese enterprises and pave the way for Vietnamese exports to this market, according to experts.
Industrial production grew on a large scale

Industrial production grew on a large scale

VCN - 55 localities had an increase in the index of industrial production (IIP) compared to the same period last year, only 8 localities had a decrease in IIP compared to the same period last year.
More export opportunities from the Chinese market

More export opportunities from the Chinese market

VCN – Besides 12 fruit and vegetable items; bird's nest, fish meal and some products for the production and processing of animal feed, dairy and seafood products that have been officially exported to China, fresh coconuts, frozen durian, crocodiles, poultry... are expected be officially exported to the Chinese market in the near future.
Read More

Your care

Latest Most read
New opportunities for Vietnam-Russia trade

New opportunities for Vietnam-Russia trade

The upcoming official visit to Vietnam by Russian President Vladimir Vladimirovich Putin is expected to open up new opportunities in bilateral relations, aiming towards the prosperous development for both sides.
MoIT launches anti-dumping probe into galvanised steel originating from China, RoK

MoIT launches anti-dumping probe into galvanised steel originating from China, RoK

The Ministry of Industry and Trade (MoIT) has requested an investigation and application of anti-dumping measures against some galvanised steel products originated from China and the Republic of Korea (RoK).
Greenovation forum for businesses to be held later this month

Greenovation forum for businesses to be held later this month

Given the rising demand for sustainable development and the associated business opportunities, the Vietnam Independent Directors Association (VNIDA) will host a forum for companies to demonstrate their commitment to both economic interests and environmental responsibility in Ho Chi Minh City on June 26.
Quang Ninh aims to attract 3 billion USD worth of FDI this year

Quang Ninh aims to attract 3 billion USD worth of FDI this year

Northern Quang Ninh province has attracted more than 1.52 billion USD worth of foreign direct investment (FDI) in the first half of this year and is poised to reach its goal of 3 billion USD in FDI for the full year.
Import-export businesses reduce costs thanks to the customs clearance location at Thanh Phuoc Port

Import-export businesses reduce costs thanks to the customs clearance location at Thanh Phuoc Port

VCN - According to Director of Binh Duong Customs Department Nguyen Tran Hieu, currently, the majority of import and export goods of businesses in the area are transported by sea.
Mobile Version