New opportunities for small and medium enterprises to access capital

(Baonghean) - In the context of difficult production and business activities, many small and medium enterprises (SMEs) have difficulty accessing bank capital. The Small and Medium Enterprise Development Fund, established in April 2016, has brought new expectations. However, accessing this source of capital is not easy.

Many preferential policies

Nghe An currently has nearly 9,000 small and medium-sized enterprises developing in various fields such as trade, services, construction, mining, processing and other industries. Among them, many enterprises are relatively dynamic in trade and commerce. However, the province's enterprise team is large but not strong, most of the enterprises operate based on bank loans, so the establishment of the Small and Medium Enterprise Development Fund (SMEDF) is expected by the business community to create new opportunities to access capital.

Production of export flooring at Song Thang Enterprise (Nghi Phu small industrial park, Vinh city).

With an initial scale of 2,000 billion VND, SMEDF is a state financial institution, under the Ministry of Planning and Investment. The purpose of the fund is to help small and medium enterprises improve their competitiveness, support enterprises to innovate and develop highly competitive and environmentally friendly products; invest in and innovate technical equipment and advanced technology; develop supporting industries, and improve corporate governance capacity.

Since 2016, the fund has entrusted 3 commercial banks (Vietcombank, HDBank, BIDV) to lend. Small and medium enterprises that meet the conditions will receive loans from the fund at preferential interest rates of 5.5% for short-term loans, and 7% for medium and long-term loans.

Barriers to borrowing conditions

Many businesses believe that the biggest barrier is the requirement for collateral. This is one of the major challenges for businesses. Many businesses currently cannot access the State's credit support programs as well as capital from banks for this reason.

Illustration.

Mr. Vu Van Tuong - Director of Thanh Xuan Company Limited shared: “Our company specializes in aquaculture of 5 hectares of shrimp, with an annual harvest of 40 - 45 tons; quarrying and processing of various types of stone for construction works, on average each year quarrying and processing about 100,000 m3 of various types of construction stone; in addition, the unit has 15 trucks specializing in transporting stone for construction works; creating regular jobs for 60 - 70 workers, with a salary of 5 - 10 million VND/person/month. The total annual revenue of the unit is about 30 billion VND. Contributing to the State budget from 2 - 2.5 billion VND/year. Currently, we want to expand the stone mining area; at the same time, renovate the shrimp pond system, water treatment system to ensure livestock farming, requiring a total capital of about 30 billion VND for investment. This year, the Small and Medium Enterprise Development Fund was established, We expect to access this source of capital. However, it is not easy to meet the loan conditions, because the fund also requires collateral like borrowing from a commercial bank. Meanwhile, during the operation process, the enterprise has to fend for itself, some assets such as family land titles have also been mortgaged to borrow capital from the bank. Now that there is no asset to mortgage, the enterprise hopes that the fund will create conditions for unsecured loans based on the capacity throughout the operation of the unit and mortgage with feasible projects that the enterprise is doing.

Currently, many enterprises are looking forward to the activities of the SMEDF Fund as a support for development. Therefore, we hope that the fund management board as well as the commercial banks entrusted with lending will accompany enterprises better so that the policy can truly come into life.

Quynh Lan