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Vietnamese private SMEs find it hard to get bank loans
The Hanoitimes – The Provincial Competitiveness Index (PCI)’s 2018 report showed that there was no improvement in information transparency as many businesses still struggled with access to information.
The Vietnam Chamber of Commerce and Industry (VCCI)’s statistics revealed that 70% of private enterprises in Vietnam are unable to access bank financing despite policies to promote credit growth, local media reported.
According to Deputy Chairman of Ho Chi Minh City Enterprise Association Pham Ngoc Hung, the limited financial resources, inexplicit financial information and deficient mortgages assets besides stiff lending procedures are the reasons why those enterprises are less likely to get bank loans.
Additionally, the Provincial Competitiveness Index (PCI)’s 2018 report showed that there was no improvement in information transparency as many businesses still struggled accessing information.
Rating on the scale from 1 to 5, the accessibility of enterprises to planning documents was merely 2.38 points in 2018, significantly lower than that of 2.63 points in 2006.
Meanwhile, the capability of Vietnamese enterprises in accessing the legal documents seems to be better, at 3.01 points in 2018 or no significant improvement compared to the early years of the survey.
By now, 69.4% of enterprises admitted acquaintances are needed to get provincial documents while the rate in 2017 was 70%.
The 2018 PCI report also pointed out that obtaining a number of required certificates is also an arduous task for the enterprises including certificates of eligibility for business in conditional business lines, certificates of competence in fire prevention and fighting, certificate of conformity with technical standards or other types of certificates and advertising license as well.
The poor information access negatively affects predictability of provincial implementation of the central government legal regulations, which in turn, hinders their plans of business expansion and investment.
Source: http://www.hanoitimes.vn/economy/2019/07/81E0D92D/vietnamese-private-smes-find-it-hard-to-get-bank-loans/