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

Obama: I Will Do 'Everything I Can' to Close Guantanamo

US president says prison continues 'to inspire jihadists and extremists around the world' More

Sierra Leone Educates on Safe Ebola Burials

Also, country is improving at rapid response to isolated outbreaks, but health workers need to be even faster, officials say More

Christmas Gains Popularity in Vietnam

Increasingly wealthy Vietnamese embrace holiday due to its non-religious glamor, commercial appeal More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
US Decision on Cuba Underscores Divisions Among Miami Cubansi
X
Sharon Behn
December 19, 2014 9:34 PM
For decades, older, more conservative Cubans have been gathering at Café Versailles on the corner of Calle Ocho to eat Cuban food and talk politics. After hearing of President Barack Obama’s decision, a number of them gathered in front of the café with posters to protest. VOA's Sharon Behn reports on the situation.
Video

Video US Decision on Cuba Underscores Divisions Among Miami Cubans

For decades, older, more conservative Cubans have been gathering at Café Versailles on the corner of Calle Ocho to eat Cuban food and talk politics. After hearing of President Barack Obama’s decision, a number of them gathered in front of the café with posters to protest. VOA's Sharon Behn reports on the situation.
Video

Video Three Cities Bid for Future Obama Presidential Library

President Barack Obama still has two years left in his term in office, but the effort to establish his post-presidential library is already underway. The bid for the Obama Presidential Library is down to four locations in three states -- New York, Hawaii, and Illinois. As VOA’s Kane Farabaugh reports, each of them played an important part in the president’s life before he reached the White House.
Video

Video Cuba Deal is Major Victory for Pope’s Diplomatic Initiatives

Pope Francis played a key role in brokering the US-Cuba deal that was made public earlier this week. It is the most stunning success so far in a series of peacemaking efforts by the pontiff. VOA religion reporter Jerome Socolovsky has more.
Video

Video Fears of More Political Gridlock in 2015

2014 proved to be a difficult year politically for President Barack Obama and a very good year for the U.S. Republican Party. Republican gains in the November midterm elections gave them control of the Senate and House of Representatives for the next two years -- setting the stage for more confrontation and gridlock in the final two years of the Obama presidency. VOA National Correspondent Jim Malone has a preview from Washington.
Video

Video Sudan School Becomes Target of Aerial Attacks

The school dropout rate is at an all-time high in Sudan's South Kordofan state because many schools have been destroyed during the three-year civil war between the government and SPLA-N rebel forces. Adam Bailes visited Sudan's Nuba Mountains' region and reports many children are simply too scared to go to school
Video

Video VOA Reporter Tours Devastated Peshawar School

Islamist militants wearing military uniforms and strapped with explosives attacked a military run school Tuesday in the northwestern Pakistani city of Peshawar. At least 141 people were killed in the horrific attack, most of them young students. VOA reporter Ayaz Gul visited the devastated school and attended the funeral of the principal who courageously tried to save her students from the deadly attack.
Video

Video Nigerians Fleeing Boko Haram Languish in Camp Near Capital

In its five-year effort to impose Islamic law in northeastern Nigeria, the Boko Haram extremist group has killed thousands of people and forced hundreds of thousands to flee. Some of those who ran for their lives now live in squalor on the edges of the capital, Abuja. Chris Stein reports for VOA.
Video

Video Aceh Rebuilt Decade After Tsunami, But Scars Remain

On December 26, 2004 there was an earthquake in the Indian Ocean so powerful it caused the Earth’s axis to wobble a few centimeters. Onshore on the island of Sumatra, the resulting tsunami was devastating. A decade later, VOA Correspondent Steve Herman reports from Banda Aceh, Indonesia, where although there is little remaining evidence of the physical devastation, the psychological scars among survivors remain.

All About America

AppleAndroid