When banks get involved in the 'value chain' of small and medium enterprises

Currently, many commercial banks have shifted their strategy to lending according to the chain of high-tech applications in agricultural production.

Enterprises that are "hungry" for capital are like anemic bodies, so they cannot grow. At a recent seminar in Hanoi on removing capital difficulties for enterprises, Mr. To Hoai Nam, Permanent Vice President and General Secretary of the Vietnam Association of Small and Medium Enterprises, said that when an enterprise has a business opportunity but cannot access capital, it means that its growth opportunities are limited.

"Lack" of capital causes poor business growth (Illustration photo: KT)

According to Mr. To Hoai Nam, the lack of access to capital has many objective reasons despite the efforts of banks and businesses. In Vietnam, nearly 70% of small and medium enterprises (SMEs) do not have access to credit capital. Of these, about 98% of private enterprises do not have access to capital.

When there is a need for business, enterprises only have two channels to mobilize: one is capital accumulated from the business process, the other is borrowing from relatives. But these two channels cannot meet the business needs. Another channel is borrowing from outside, but this channel is too risky, the interest rate is too high. That is why private enterprises in Vietnam cannot grow, said the General Secretary of the Association of Small and Medium Enterprises.

Mr. To Hoai Nam analyzed that banks do not lack capital but only lack confidence stemming from the trust of businesses. To unlock capital for businesses, more realistic measures are needed.

First of all, Mr. Nam believes that banks, as special enterprises, with higher professionalism and strong financial potential, must be more proactive in their relationships with enterprises, even have to sacrifice and be a bit bold for long-term benefits.

Banks should support businesses in areas where they need support, such as supporting businesses in risk management, supporting businesses in developing better investment plans for equipment and factories, supporting businesses in manufacturing and trading according to product chains, and increasing transparency in financial reporting, Mr. Nam stated.

SMEs need to improve their creditworthiness to easily borrow capital (Illustration: KT)

Sharing this view, Mr. Tran Van Tan, Deputy Director of the Department of Credit for Economic Sectors of the State Bank, said that currently many commercial banks have shifted their strategy from lending to large enterprises and industrial production enterprises to the retail sector and rural agriculture sector, especially lending according to the chain of high-tech applications in agricultural production.

According to Mr. Tan, this is a very good direction to support small and medium-sized enterprises and the private economic sector. Since July 7, the State Bank has also adjusted lending interest rates for priority sectors to direct credit capital to production and business. This is also a move by the State Bank to direct credit capital to small and medium-sized enterprises in priority sectors.

Also related to businesses' access to capital, economic expert Nguyen Minh Phong said that there should be specific mechanisms for special subjects such as creative startups, businesses participating in chains, high-tech businesses or businesses in priority fields.

Mr. Phong stated the reality: Banks often have a tendency to like doing big projects, less effort, higher safety, more commission, better rewards.

Therefore, according to this economic expert, to ensure a wider source of capital, it is necessary to do well in chain lending. This is clearly stated in the law on supporting small and medium enterprises, even unsecured loans or other lending activities need to prioritize this as the focus.

In addition, Mr. Nguyen Minh Phong emphasized that businesses should also boldly join together to meet the conditions for long-term investment loans. When participating in the chain, SMEs will have the conditions to develop better, grow larger, and meet the lending conditions from banks./.

According to VOV