News / Asia

Group Aims to Boost Vietnam’s Small, Medium Firms

Ninety percent of enterprises in Vietnam are small to medium businesses, which are seen as a pillar of economic stability in the country.Ninety percent of enterprises in Vietnam are small to medium businesses, which are seen as a pillar of economic stability in the country.
x
Ninety percent of enterprises in Vietnam are small to medium businesses, which are seen as a pillar of economic stability in the country.
Ninety percent of enterprises in Vietnam are small to medium businesses, which are seen as a pillar of economic stability in the country.
— An Viet Long is a company that makes remote-control helicopters. But when founder Loc Le used to send them to a third party for coating, they would come back in the wrong color. Or they would get dipped too long in chemicals. Or the other company would lose the toys altogether.
 
Loc said such an unreliable supply chain is a key problem for small and medium businesses like his in Vietnam.
 
“If you do business in China or Thailand, you have industrial support,” Loc told VOA. “They have the materials available. But for us, it’s very limited.”
 
Looking to tackle common issues faced by small and medium enterprises (SMEs), Loc and other entrepreneurs met Tuesday at a workshop run by the U.S.-Asean Business Council, which promotes commerce between the United States and the Association of Southeast Asian Nations. Despite their size, these smaller businesses are seen as essential to Vietnam’s economic stability and therefore its future overall. But as Loc’s experience with chemical coating showed, local capacity is still lacking.
 
“SMEs are in an inferior position because they’re caught between state-owned enterprises and foreign direct invested companies,” Vu Tu Thanh, the Business Council’s Vietnam representative, said at the workshop. “They don’t have the proportional support or resources of these two sectors.”
 
Small business owners rarely exercise the lobbying power of state-owned conglomerates and multi-national companies. Even those who do form trade associations sometimes use them for services and information, rather than to pool forces and voice their interests to the government.
 
While their contribution to GDP is dwarfed by that of state and foreign firms, SMEs make up roughly 90 percent of the businesses in Vietnam, according to Jeff McLean, general manager of UPS Vietnam, which co-sponsored the workshop. Analysts say SME’s can provide some job stability in the face of economic recessions, when the collapse of large companies has more impact on unemployment rates.
 
At the workshop, businesses zeroed in on a few areas where improvements would boost their local capacity: human resources, technology, and capital.
 
Vietnam faces a credit crunch because years of loose lending allowed many borrowers to rack up debts they couldn’t afford to repay. The country now has the highest rate of bad debt in Southeast Asia. Most of those non-performing loans went to state-backed firms, so when lending tightened up, it was smaller companies that paid the price in the form of less access to capital.
 
“A lot of SMEs around the world, not just in Vietnam, complain that banks are too strict, they don’t lend them money,” said Raymond Lim, a senior vice president at Citibank in Singapore.
 
He conceded that SMEs have an “inherent disadvantage” compared with big companies when applying for loans. But to help improve their chances, Lim told business owners that banks evaluate applicants based on such factors as reputation, record keeping, financial reports, and cash flow to make sure they can always pay bills on time. “For SMEs, if you want to grow, cash flow is everything, it is all about cash flow,” he said.
 
Panelists also urged entrepreneurs to take advantage of technologies that could streamline their operations. A Visa representative called Vietnam a “very, very high cash-driven society” where credit and debit cards have an extremely low penetration. Yet internet use here is the second highest in Southeast Asia, right behind Thailand’s rate, according to a Google analyst.
 
“What that tells us is, there is potential for growth” in e-commerce, said Prashant Aggarwal, a regional director for Visa. He also said that in terms of credit card fraud, Asia is more secure than most continents.
 
That was part of the reason some at the workshop recommended Vietnamese businesses focus on Asia first for their growth strategies.
 
Shiumei Lin, Vice Chair of the US-Asean Business Council's Vietnam Committee, said SMEs should make use of the advanced transit links across Asean, as well as Vietnam’s 20 or so free trade deals, such as with Japan or China. She said SMEs should not let their size intimidate them from exporting to these larger economies.
 
“Actually, small businesses have a huge advantage,” Lin said. “The fact that you are small means you are able to be much more nimble, much more active, able to respond to market needs.”

You May Like

EU Court Fines Poland for Hosting CIA 'Black Sites'

Ruling is first time a court has acknowledged suspects were held and tortured at the sites, under US program launched following the 9/11 terrorist attacks More

Migrant Issues Close to Home Spur Groups to Take Action

Groups placing water, food in the desert, or aiding detainees after release, have one common goal: no more deaths of migrants crossing illegally into the US More

Video At AIDS Conference, Prevention Pill Stirs Excitement

Truveda shows promise, spurring debate over access and other approaches More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Treatment for Childhood Epilepsy Heats up Medical Marijuana Debatei
X
Shelley Schlender
July 24, 2014 6:43 PM
In the United States, marijuana is classed as an illegal drug by the federal government. But nearly half the states have legalized it, to some degree. Proponents say some strains of marijuana might have exceptional health benefits, for treating pain or inflammation in chronic conditions such as cancer, multiple sclerosis and epilepsy. Shelley Schlender reports on a strain of medical marijuana developed in Colorado that is reputed to reduce seizures in childhood epilepsy
Video

Video Treatment for Childhood Epilepsy Heats up Medical Marijuana Debate

In the United States, marijuana is classed as an illegal drug by the federal government. But nearly half the states have legalized it, to some degree. Proponents say some strains of marijuana might have exceptional health benefits, for treating pain or inflammation in chronic conditions such as cancer, multiple sclerosis and epilepsy. Shelley Schlender reports on a strain of medical marijuana developed in Colorado that is reputed to reduce seizures in childhood epilepsy
Video

Video Airbus Adds Metal 3D Printed Parts to New Jets

By the end of this year, European aircraft manufacturing consortium Airbus plans to deliver the first of its new, extra-wide-body passenger jets, the A350-XWB. Among other technological innovations, the new plane will also incorporate metal parts made in a 3-D printer. VOA's George Putic has more.
Video

Video Death Toll From Israel-Gaza Conflict Surpasses 700

Gaza officials say a shelling hit a compound housing a United Nations-run school in the Gaza Strip, killing more than a dozen people, during an Israeli offensive in the area. Heavy fighting between the Israeli military and Hamas militants continued on Thursday, pushing up the death toll. So far, more than 730 Palestinians and 35 Israelis have been killed in the conflict. VOA's Scott Bobb has the latest from Jerusalem.
Video

Video AIDS Conference Welcomes Exciting Developments in HIV Treatment, Prevention

Significant strides have been made in recent years toward the treatment and prevention of HIV, the virus that causes AIDS. This year, at the International AIDS Conference, the AIDS community welcomed progress on a new pill that may prevent transmission of the deadly virus. VOA’s Anita Powell reports from Melbourne, Australia.
Video

Video Israel Targets Gaza Supply Tunnels

The Israeli military has launched a ground operation in Gaza to destroy the myriad tunnels that may have been used to smuggle weapons to Hamas. VOA's Zlatica Hoke reports that could mean more hardship for the people of Gaza, who obtain some of their essential supplies through these underground passages
Video

Video Researchers Target Low-Cost Avatar Technology

Scientists at the University of Southern California Institute for Creative Technologies say 3-dimensional representations could revolutionize social media. Elizabeth Lee has more from Los Angeles.
Video

Video IAEA: Iran Turns its Enriched Uranium Into Less Harmful Form

Iran has converted its stockpiles of enriched uranium into a less dangerous form that is more difficult to use for nuclear weapons, according to the United Nations’ Atomic Energy Agency. The move complies with an interim deal reached with Western powers on Iran's nuclear program last year, in exchange for easing of sanctions. Henry Ridgwell reports for VOA from London.
Video

Video In Cambodia, HIV Diagnosis Brings Deadly Shame

Although HIV/AIDS is now a treatable condition, a positive diagnosis is still a life altering experience. In Cambodia, people living with HIV are often disowned by friends, family and the community. This humiliation can be unbearable. We bring you one Cambodian woman’s struggle to overcome a life tragedy and her own HIV positive diagnosis.

AppleAndroid