The survey, conducted by the Central Institute for Economic Management (CIEM) in cooperation with Danish Danida organization, showed that difficult bank loan access was the biggest problem for SMEs. The stiff competition, limited demand for products and the difficulties for getting land for workshop premises have been cited as the second, third and fourth biggest problems.

Therefore, a lot of polled enterprises said that what they most want from state management authorities is the support in accessing bank credit. They have also mentioned the support in getting land for workshop premises, and marketing activities, while emphasizing the need to improve the policies on private enterprises and remove complicated procedures.

In fact, the State has been trying to improve the capability for bank credit access by allowing more kinds of mortgaged assets, but SMEs still lack capital for their projects.

35-45% of enterprises reportedly regularly sought capital from banks, and 19% were refused. Other enterprises sought irregular capital, and some of them also had difficulties in borrowing money. A lot of enterprises said that they never sought capital from banks, because they did not have suitable mortgaged assets, or they thought the procedures were too complicated, or they found the interest rates unaffordable.

The poll showed that 69% of bank loans came from state owned banks. The loans in urban areas have the average value of $52,500, and the figure is $12,171 for rural areas. Meanwhile, the enterprises in rural areas pay the average interest rate of 0.989% per month, and the ones in urban areas pay 0.897%.

Some 82% of enterprises had mortgaged assets for their loans. 62% of borrowers in rural areas used the land use certificate as the mortgage, and the figure was 30% in urban areas.

As for unofficial credit, the survey has found out that the market is growing very rapidly in Vietnam. However, only 50% of polled enterprises said that they met difficulties in accessing unofficial credit.

The scale and the average interest rate of unofficial credit were both lower than that of official credit. The unofficial loans were just equal to 1/3 of official loans, while enterprises did not have to pay interest for the unofficial loans, since 2/3 of the lenders were relatives and friends. Generally, mortgaged assets were not required for unofficial loans, while 90% of official loans required mortgaged assets.

The surveyors have concluded that the difficulties in bank loan access remain the biggest hindrances for enterprises’ development.

Most of the polled SMEs did not think that taxes was a burden for them. Statistics showed that taxes just amounted to 2.63% of total revenue.

However, SMEs have been found as having the high percentage of underground expenses, considered as other kinds of tax. 41% of polled enterprises said that they gave bribery to state officials, though the sums of money were small if compared with the total revenue (0.5%). One third of the enterprises gave money to state officials in order to access public services more easily, and 16% gave bribes in order to get preferences in bidding. Enterprises considered the sums of money as a necessity that helped their business run smoothly.

Source: TBKTVN