Under the decree, the Government will assist small and medium-sized enterprises (SMEs) in the areas of finance and land area, technological and technical capacity, and market expansion. Measures for broadening public services, distribution of information and consulting, and human resources development are also included under the document.

"These measures aim to create a foundation for SME’s, which make up 90 per cent of all enterprises nationwide, to solve their basic financial barriers and lagging technological and human resources capacity," said Cao Sy Kiem, chairman of the Viet Nam Association of SMEs.

The Ministry of Finance and the State Bank of Viet Nam have been charged with diversifying their services to benefit SMEs, such as establishing a mechanism for guaranteeing credit and offering investment management and financial consulting services to SMEs.

"The Viet Nam Development Bank will serve as the warrantor for SMEs when they seek to borrow money from other banks," said Kiem.

"In the economic downturn, most banks refused to lend to SMEs, forcing our factory to cease operation for several months. As a textile and garment company, our customers only pay on their contracts when they receive the products, so our on-hand capital was very low," said Le Thi Phiet, director of the Nghia Hung Garment and Textile Company.

"I had to resort to seeking help from my friends and others to stay in business," she said.

"According to the new decree, even SMEs with overdue debts will be able to borrow from banks if they can prove to the Viet Nam Development Bank that their troubles result from negative impacts of inflation and economic downturn," said Kiem.

"That is big news for SMEs who have had difficulty raising funds in the past," said Phiet.

Moreover, women-owned enterprises with majority female workers will benefit from more favourable lending options, according to the decree.

Requirements for provincial and central-level people’s committees to reserve land for industrial zones to include SMEs are also part of the new decree.

"In the former SME support decree, there were no regulations which defined the specific agencies responsible for implementing this type of programme, so enterprises like us had no idea which agency to go to for assistance," said Nguyen Hoang Van, director of Van Hung Furniture Company in Ha Noi’s Thach That District.

"Our company has wanted to increase its land area for years to build new workshops but we know we can’t afford the space. We sought help from the district-level people’s committee but there were no mechanisms for them to assist us," said Van.

In order to improve the technological capacity for SMEs, the decree calls for the Ministry of Science and Technology to help them register and transfer intellectual property rights for their products and services and to apply new technologies for production and business operation.

"This is to avoid a situation where SMEs would lose their brand names and intellectual property rights as happened to other businesses in the past due to lack of information and legal knowledge," said Kiem.

"Through the training courses, the State will also provide support to SMEs to improve their project development capacity in order to meet the technical demands of potential credit institutions," said Kiem.

"The courses held by state agencies will help SMEs save on costs and turn training into a long-term process," he added.

The Ministry of Planning and Investment will also assist the Government in SME support activities.

Source: VNN/VNS